Why Eva Ados Sees High Risk In Chinese Stocks

On CNBC’s "Trading Nation," Tyler Mathisen discussed the recent bounce in Chinese shares despite the country’s GDP growth slowing to 4.9% in the third quarter.

Eva Ados of ERShares said the holdings of the 170 Chinese companies that they are tracking have risen by 11% month-to-date due to overreaction in Chinese markets last month.

Several companies continue to struggle to meet the latest regulatory demands and regulatory risks can be expected to remain, she added.

Issues in China, like Evergrande and energy crisis, are likely to impact the country's future growth rate, Ados said, while adding that there is higher risk and a lower expected rate of return in the country.

Price Action: Shares of Chinese companies have climbed sharply in October, with Bilibili Inc's BILI shares jumping by 24% and stocks of Alibaba Group Holding Limited BABA and JD.com, Inc. JD climbing by 19% each during the month.