Correlation Between Chia and IShares Core

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

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

Diversification Opportunities for Chia and IShares Core

0.09

Correlation Coefficient

Chia  IShares Core

Significant diversification

The 3 months correlation between Chia and IShares is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Chia and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI and Chia 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 Chia are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of Chia i.e., Chia and IShares Core go up and down completely randomly.

Pair Corralation between Chia and IShares Core

Assuming the 90 days trading horizon Chia is expected to generate 9.22 times more return on investment than IShares Core. However, Chia is 9.22 times more volatile than iShares Core MSCI. It trades about 0.11 of its potential returns per unit of risk. iShares Core MSCI is currently generating about -0.05 per unit of risk. If you would invest  1,339  in Chia on October 24, 2024 and sell it today you would earn a total of  667.00  from holding Chia or generate 49.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Chia  vs.  iShares Core MSCI

Chia

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

iShares Core MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Core MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IShares Core is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Chia and IShares Core

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

The idea behind Chia and iShares Core 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.