Correlation Between Exchange Traded and CHIU

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

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

Diversification Opportunities for Exchange Traded and CHIU

0.72

Correlation Coefficient

Exchange Traded  CHIU

Poor diversification

The 3 months correlation between Exchange and CHIU is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and CHIU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIU and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with CHIU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIU has no effect on the direction of Exchange Traded i.e., Exchange Traded and CHIU go up and down completely randomly.

Pair Corralation between Exchange Traded and CHIU

If you would invest  1,294  in CHIU on September 21, 2024 and sell it today you would earn a total of  0.00  from holding CHIU or generate 0.0% return on investment over 90 days.

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

Exchange Traded Concepts  vs.  CHIU

Exchange Traded Concepts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exchange Traded Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Exchange Traded is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

CHIU

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHIU has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, CHIU is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Exchange Traded and CHIU

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

The idea behind Exchange Traded Concepts and CHIU 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.