Correlation Between CHIK and Invesco Golden

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

By analyzing existing cross correlation between CHIK and Invesco Golden Dragon, you can compare the effects of market volatilities on CHIK and Invesco Golden 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 Invesco Golden. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHIK and Invesco Golden.

Diversification Opportunities for CHIK and Invesco Golden

0.15

Correlation Coefficient

CHIK  Invesco Golden

Average diversification

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

Pair Corralation between CHIK and Invesco Golden

If you would invest  2,612  in Invesco Golden Dragon on October 1, 2024 and sell it today you would earn a total of  46.00  from holding Invesco Golden Dragon or generate 1.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

CHIK  vs.  Invesco Golden Dragon

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.

Invesco Golden Dragon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Golden Dragon has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Etf's technical and fundamental indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the ETF firm stakeholders.

Pair Trading with CHIK and Invesco Golden

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

The idea behind CHIK and Invesco Golden Dragon 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.