Correlation Between WisdomTree Silver and KraneShares CSI
Can any of the company-specific risk be diversified away by investing in both WisdomTree Silver and KraneShares CSI 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 WisdomTree Silver and KraneShares CSI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Silver 3x and KraneShares CSI China, you can compare the effects of market volatilities on WisdomTree Silver and KraneShares CSI 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 WisdomTree Silver with a short position of KraneShares CSI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Silver and KraneShares CSI.
Diversification Opportunities for WisdomTree Silver and KraneShares CSI
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and KraneShares is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Silver 3x and KraneShares CSI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares CSI China and WisdomTree Silver 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 WisdomTree Silver 3x are associated (or correlated) with KraneShares CSI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares CSI China has no effect on the direction of WisdomTree Silver i.e., WisdomTree Silver and KraneShares CSI go up and down completely randomly.
Pair Corralation between WisdomTree Silver and KraneShares CSI
Assuming the 90 days trading horizon WisdomTree Silver 3x is expected to under-perform the KraneShares CSI. In addition to that, WisdomTree Silver is 2.21 times more volatile than KraneShares CSI China. It trades about -0.23 of its total potential returns per unit of risk. KraneShares CSI China is currently generating about -0.06 per unit of volatility. If you would invest 1,448 in KraneShares CSI China on August 24, 2024 and sell it today you would lose (44.00) from holding KraneShares CSI China or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Silver 3x vs. KraneShares CSI China
Performance |
| Timeline |
| WisdomTree Silver |
| KraneShares CSI China |
WisdomTree Silver and KraneShares CSI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Silver and KraneShares CSI
The main advantage of trading using opposite WisdomTree Silver and KraneShares CSI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Silver position performs unexpectedly, KraneShares CSI 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 CSI will offset losses from the drop in KraneShares CSI's long position.| WisdomTree Silver vs. Leverage Shares 3x | WisdomTree Silver vs. WisdomTree SP 500 | WisdomTree Silver vs. Leverage Shares 3x | WisdomTree Silver vs. GraniteShares FAANG ETC |
| KraneShares CSI vs. Leverage Shares 3x | KraneShares CSI vs. WisdomTree SP 500 | KraneShares CSI vs. WisdomTree Silver 3x | KraneShares CSI vs. Leverage Shares 3x |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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