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 China, 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

0.14

Correlation Coefficient

CHIK  IShares MSCI

Average diversification

The 3 months correlation between CHIK and IShares is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CHIK and iShares MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI China 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 China 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  4,649  in iShares MSCI China on October 1, 2024 and sell it today you would earn a total of  98.00  from holding iShares MSCI China or generate 2.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

CHIK  vs.  iShares MSCI China

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 newest stock price mess, may contribute to short-term losses for the institutional investors.

iShares MSCI China

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI China has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf 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 China 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.