Correlation Between CHIK and IShares MSCI

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

By analyzing existing cross correlation between CHIK and iShares MSCI Hong, you can compare the effects of market volatilities on CHIK and IShares MSCI 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 CHIK with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHIK and IShares MSCI.

Diversification Opportunities for CHIK and IShares MSCI

-0.15

Correlation Coefficient

CHIK  IShares MSCI

Good diversification

The 3 months correlation between CHIK and IShares is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CHIK and iShares MSCI Hong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Hong and CHIK 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 CHIK are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Hong has no effect on the direction of CHIK i.e., CHIK and IShares MSCI go up and down completely randomly.

Pair Corralation between CHIK and IShares MSCI

If you would invest  1,659  in iShares MSCI Hong on September 22, 2024 and sell it today you would lose (3.00) from holding iShares MSCI Hong or give up 0.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

CHIK  vs.  iShares MSCI Hong

CHIK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHIK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, CHIK is not utilizing all of its potentials. The new stock price mess, may contribute to short-term losses for the institutional investors.

iShares MSCI Hong

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Hong has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, IShares MSCI is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CHIK and IShares MSCI

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

The idea behind CHIK and iShares MSCI Hong 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.