Correlation Between SPDR SP and CHIS
Can any of the company-specific risk be diversified away by investing in both SPDR SP and CHIS 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 CHIS 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 CHIS, you can compare the effects of market volatilities on SPDR SP and CHIS 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 CHIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and CHIS.
Diversification Opportunities for SPDR SP and CHIS
Pay attention - limited upside
The 3 months correlation between SPDR and CHIS is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP China and CHIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIS 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 CHIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIS has no effect on the direction of SPDR SP i.e., SPDR SP and CHIS go up and down completely randomly.
Pair Corralation between SPDR SP and CHIS
If you would invest 1,981 in CHIS on September 3, 2024 and sell it today you would earn a total of 0.00 from holding CHIS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
SPDR SP China vs. CHIS
Performance |
| Timeline |
| SPDR SP China |
| CHIS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR SP and CHIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and CHIS
The main advantage of trading using opposite SPDR SP and CHIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, CHIS 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 CHIS will offset losses from the drop in CHIS'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 |
| CHIS vs. Franklin FTSE South | CHIS vs. Franklin FTSE Japan | CHIS vs. Franklin FTSE India | CHIS vs. Franklin FTSE Brazil |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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