Correlation Between CHIX and VanEck Biotech
Can any of the company-specific risk be diversified away by investing in both CHIX and VanEck Biotech 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 CHIX and VanEck Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHIX and VanEck Biotech ETF, you can compare the effects of market volatilities on CHIX and VanEck Biotech 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 CHIX with a short position of VanEck Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHIX and VanEck Biotech.
Diversification Opportunities for CHIX and VanEck Biotech
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CHIX and VanEck is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CHIX and VanEck Biotech ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Biotech ETF and CHIX 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 CHIX are associated (or correlated) with VanEck Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Biotech ETF has no effect on the direction of CHIX i.e., CHIX and VanEck Biotech go up and down completely randomly.
Pair Corralation between CHIX and VanEck Biotech
If you would invest 1,057 in CHIX on January 25, 2024 and sell it today you would earn a total of 0.00 from holding CHIX or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
CHIX vs. VanEck Biotech ETF
Performance |
| Timeline |
| CHIX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VanEck Biotech ETF |
CHIX and VanEck Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHIX and VanEck Biotech
The main advantage of trading using opposite CHIX and VanEck Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHIX position performs unexpectedly, VanEck Biotech 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 VanEck Biotech will offset losses from the drop in VanEck Biotech's long position.| CHIX vs. iShares MSCI India | CHIX vs. HUMANA INC | CHIX vs. Aquagold International | CHIX vs. Morningstar Unconstrained Allocation |
| VanEck Biotech vs. iShares Insurance ETF | VanEck Biotech vs. SCOR PK | VanEck Biotech vs. Morningstar Unconstrained Allocation | VanEck Biotech vs. SPACE |
Check out your portfolio center.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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