Correlation Between Themes China and IShares 0

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Can any of the company-specific risk be diversified away by investing in both Themes China and IShares 0 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 Themes China and IShares 0 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Themes China Generative and iShares 0 5 Year, you can compare the effects of market volatilities on Themes China and IShares 0 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 Themes China with a short position of IShares 0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Themes China and IShares 0.

Diversification Opportunities for Themes China and IShares 0

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Themes and IShares is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Themes China Generative and iShares 0 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 0 5 and Themes China 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 Themes China Generative are associated (or correlated) with IShares 0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 0 5 has no effect on the direction of Themes China i.e., Themes China and IShares 0 go up and down completely randomly.

Pair Corralation between Themes China and IShares 0

Given the investment horizon of 90 days Themes China Generative is expected to generate 28.26 times more return on investment than IShares 0. However, Themes China is 28.26 times more volatile than iShares 0 5 Year. It trades about 0.1 of its potential returns per unit of risk. iShares 0 5 Year is currently generating about 0.14 per unit of risk. If you would invest  2,937  in Themes China Generative on August 15, 2025 and sell it today you would earn a total of  451.00  from holding Themes China Generative or generate 15.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Themes China Generative  vs.  iShares 0 5 Year

 Performance 
       Timeline  
Themes China Generative 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Themes China Generative are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Themes China displayed solid returns over the last few months and may actually be approaching a breakup point.
iShares 0 5 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in iShares 0 5 Year are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, IShares 0 is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Themes China and IShares 0 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Themes China and IShares 0

The main advantage of trading using opposite Themes China and IShares 0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Themes China position performs unexpectedly, IShares 0 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 0 will offset losses from the drop in IShares 0's long position.
The idea behind Themes China Generative and iShares 0 5 Year 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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