Correlation Between GraniteShares and KraneShares ICBCCS
Can any of the company-specific risk be diversified away by investing in both GraniteShares and KraneShares ICBCCS 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 ICBCCS 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 ICBCCS SP, you can compare the effects of market volatilities on GraniteShares and KraneShares ICBCCS 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 ICBCCS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and KraneShares ICBCCS.
Diversification Opportunities for GraniteShares and KraneShares ICBCCS
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GraniteShares and KraneShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and KraneShares ICBCCS SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares ICBCCS 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 ICBCCS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares ICBCCS has no effect on the direction of GraniteShares i.e., GraniteShares and KraneShares ICBCCS go up and down completely randomly.
Pair Corralation between GraniteShares and KraneShares ICBCCS
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to under-perform the KraneShares ICBCCS. In addition to that, GraniteShares is 3.15 times more volatile than KraneShares ICBCCS SP. It trades about -0.03 of its total potential returns per unit of risk. KraneShares ICBCCS SP is currently generating about 0.05 per unit of volatility. If you would invest 79,560 in KraneShares ICBCCS SP on August 27, 2024 and sell it today you would earn a total of 12,890 from holding KraneShares ICBCCS SP or generate 16.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. KraneShares ICBCCS SP
Performance |
| Timeline |
| GraniteShares 3x Short |
| KraneShares ICBCCS |
GraniteShares and KraneShares ICBCCS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and KraneShares ICBCCS
The main advantage of trading using opposite GraniteShares and KraneShares ICBCCS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, KraneShares ICBCCS 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 ICBCCS will offset losses from the drop in KraneShares ICBCCS's long position.| GraniteShares vs. WisdomTree SP 500 | GraniteShares vs. WisdomTree Silver 3x | GraniteShares vs. Lyxor 10Y Inflation | GraniteShares vs. GraniteShares 3x Long |
| KraneShares ICBCCS vs. Leverage Shares 3x | KraneShares ICBCCS vs. WisdomTree SP 500 | KraneShares ICBCCS vs. WisdomTree Silver 3x | KraneShares ICBCCS 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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