Correlation Between IShares MSCI and CHIX
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and CHIX 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 IShares MSCI and CHIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI China and CHIX, you can compare the effects of market volatilities on IShares MSCI and CHIX 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 IShares MSCI with a short position of CHIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and CHIX.
Diversification Opportunities for IShares MSCI and CHIX
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and CHIX is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and CHIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIX and IShares MSCI 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 iShares MSCI China are associated (or correlated) with CHIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIX has no effect on the direction of IShares MSCI i.e., IShares MSCI and CHIX go up and down completely randomly.
Pair Corralation between IShares MSCI and CHIX
If you would invest 2,646 in iShares MSCI China on February 1, 2024 and sell it today you would earn a total of 12.00 from holding iShares MSCI China or generate 0.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 4.55% |
Values | Daily Returns |
iShares MSCI China vs. CHIX
Performance |
Timeline |
iShares MSCI China |
CHIX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
IShares MSCI and CHIX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares MSCI and CHIX
The main advantage of trading using opposite IShares MSCI and CHIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, CHIX 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 CHIX will offset losses from the drop in CHIX's long position.IShares MSCI vs. iShares MSCI China | IShares MSCI vs. KraneShares Bosera MSCI | IShares MSCI vs. WisdomTree China ex State Owned | IShares MSCI vs. iShares MSCI China |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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