Correlation Between SPDR SP and CHIK
Can any of the company-specific risk be diversified away by investing in both SPDR SP and CHIK at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SPDR SP and CHIK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP China and CHIK, you can compare the effects of market volatilities on SPDR SP and CHIK and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SPDR SP with a short position of CHIK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and CHIK.
Diversification Opportunities for SPDR SP and CHIK
Excellent diversification
The 3 months correlation between SPDR and CHIK is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP China and CHIK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIK and SPDR SP is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SPDR SP China are associated (or correlated) with CHIK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIK has no effect on the direction of SPDR SP i.e., SPDR SP and CHIK go up and down completely randomly.
Pair Corralation between SPDR SP and CHIK
If you would invest 7,242 in SPDR SP China on September 3, 2024 and sell it today you would earn a total of 471.00 from holding SPDR SP China or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.68% |
| Values | Daily Returns |
SPDR SP China vs. CHIK
Performance |
| Timeline |
| SPDR SP China |
| CHIK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR SP and CHIK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and CHIK
The main advantage of trading using opposite SPDR SP and CHIK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, CHIK can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CHIK will offset losses from the drop in CHIK's long position.| SPDR SP vs. Invesco Golden Dragon | SPDR SP vs. iShares MSCI Hong | SPDR SP vs. iShares MSCI China | SPDR SP vs. iShares China Large Cap |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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