Correlation Between CHIS and Global X

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

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

Diversification Opportunities for CHIS and Global X

0.02

Correlation Coefficient

CHIS  Global X

Significant diversification

The 3 months correlation between CHIS and Global is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CHIS and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI and CHIS 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 CHIS are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MSCI has no effect on the direction of CHIS i.e., CHIS and Global X go up and down completely randomly.

Pair Corralation between CHIS and Global X

If you would invest  1,682  in Global X MSCI on September 20, 2024 and sell it today you would earn a total of  294.00  from holding Global X MSCI or generate 17.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.53%
Values	Daily Returns

CHIS  vs.  Global X MSCI

CHIS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Global X MSCI

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X MSCI are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Global X reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHIS and Global X

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

The idea behind CHIS and Global X MSCI 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.