Correlation Between GraniteShares and KraneShares CSI
Can any of the company-specific risk be diversified away by investing in both GraniteShares 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 GraniteShares and KraneShares CSI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares 3x Short and KraneShares CSI China, you can compare the effects of market volatilities on GraniteShares 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 GraniteShares with a short position of KraneShares CSI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and KraneShares CSI.
Diversification Opportunities for GraniteShares and KraneShares CSI
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GraniteShares and KraneShares is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short 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 GraniteShares 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 GraniteShares 3x Short 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 GraniteShares i.e., GraniteShares and KraneShares CSI go up and down completely randomly.
Pair Corralation between GraniteShares and KraneShares CSI
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to under-perform the KraneShares CSI. In addition to that, GraniteShares is 1.7 times more volatile than KraneShares CSI China. It trades about 0.0 of its total potential returns per unit of risk. KraneShares CSI China is currently generating about 0.04 per unit of volatility. If you would invest 1,215 in KraneShares CSI China on August 30, 2024 and sell it today you would earn a total of 88.00 from holding KraneShares CSI China or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. KraneShares CSI China
Performance |
| Timeline |
| GraniteShares 3x Short |
| KraneShares CSI China |
GraniteShares and KraneShares CSI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and KraneShares CSI
The main advantage of trading using opposite GraniteShares and KraneShares CSI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 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.| GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 1x Short |
| KraneShares CSI vs. Leverage Shares 3x | KraneShares CSI vs. GraniteShares 3x Short | KraneShares CSI vs. WisdomTree Natural Gas | 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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