Correlation Between 159695 and Bosera ChiNext

Can any of the company-specific risk be diversified away by investing in both 159695 and Bosera ChiNext 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 159695 and Bosera ChiNext into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 159695 and Bosera ChiNext ETF, you can compare the effects of market volatilities on 159695 and Bosera ChiNext 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 159695 with a short position of Bosera ChiNext. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159695 and Bosera ChiNext.

Diversification Opportunities for 159695 and Bosera ChiNext

0.99

Correlation Coefficient

159695  Bosera ChiNext

No risk reduction

The 3 months correlation between 159695 and Bosera is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding 159695 and Bosera ChiNext ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosera ChiNext ETF and 159695 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 159695 are associated (or correlated) with Bosera ChiNext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosera ChiNext ETF has no effect on the direction of 159695 i.e., 159695 and Bosera ChiNext go up and down completely randomly.

Pair Corralation between 159695 and Bosera ChiNext

Assuming the 90 days trading horizon 159695 is expected to generate 1.46 times less return on investment than Bosera ChiNext. But when comparing it to its historical volatility, 159695 is 1.55 times less risky than Bosera ChiNext. It trades about 0.16 of its potential returns per unit of risk. Bosera ChiNext ETF is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  143.00  in Bosera ChiNext ETF on September 3, 2024 and sell it today you would earn a total of  61.00  from holding Bosera ChiNext ETF or generate 42.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

159695  vs.  Bosera ChiNext ETF

159695

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 159695 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 159695 sustained solid returns over the last few months and may actually be approaching a breakup point.

Bosera ChiNext ETF

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bosera ChiNext ETF are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bosera ChiNext sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 159695 and Bosera ChiNext

The main advantage of trading using opposite 159695 and Bosera ChiNext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159695 position performs unexpectedly, Bosera ChiNext 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 Bosera ChiNext will offset losses from the drop in Bosera ChiNext's long position.

The idea behind 159695 and Bosera ChiNext ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.