Correlation Between Leverage Shares and KraneShares Electric
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and KraneShares Electric 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 Leverage Shares and KraneShares Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and KraneShares Electric Vehicles, you can compare the effects of market volatilities on Leverage Shares and KraneShares Electric 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 Leverage Shares with a short position of KraneShares Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and KraneShares Electric.
Diversification Opportunities for Leverage Shares and KraneShares Electric
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leverage and KraneShares is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and KraneShares Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Electric and Leverage Shares 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 Leverage Shares 3x are associated (or correlated) with KraneShares Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Electric has no effect on the direction of Leverage Shares i.e., Leverage Shares and KraneShares Electric go up and down completely randomly.
Pair Corralation between Leverage Shares and KraneShares Electric
Assuming the 90 days trading horizon Leverage Shares 3x is expected to under-perform the KraneShares Electric. In addition to that, Leverage Shares is 5.94 times more volatile than KraneShares Electric Vehicles. It trades about -0.14 of its total potential returns per unit of risk. KraneShares Electric Vehicles is currently generating about 0.12 per unit of volatility. If you would invest 1,261 in KraneShares Electric Vehicles on November 28, 2024 and sell it today you would earn a total of 48.00 from holding KraneShares Electric Vehicles or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Leverage Shares 3x vs. KraneShares Electric Vehicles
Performance |
| Timeline |
| Leverage Shares 3x |
| KraneShares Electric |
Leverage Shares and KraneShares Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and KraneShares Electric
The main advantage of trading using opposite Leverage Shares and KraneShares Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, KraneShares Electric 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 KraneShares Electric will offset losses from the drop in KraneShares Electric's long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| KraneShares Electric vs. Vanguard FTSE Developed | KraneShares Electric vs. Leverage Shares 2x | KraneShares Electric vs. Amundi Index Solutions | KraneShares Electric vs. Amundi Index Solutions |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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