Correlation Between KraneShares Artificial and Freedom Day
Can any of the company-specific risk be diversified away by investing in both KraneShares Artificial and Freedom Day 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 KraneShares Artificial and Freedom Day into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Artificial Intelligence and Freedom Day Dividend, you can compare the effects of market volatilities on KraneShares Artificial and Freedom Day 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 KraneShares Artificial with a short position of Freedom Day. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Artificial and Freedom Day.
Diversification Opportunities for KraneShares Artificial and Freedom Day
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KraneShares and Freedom is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Artificial Intelli and Freedom Day Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Day Dividend and KraneShares Artificial 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 KraneShares Artificial Intelligence are associated (or correlated) with Freedom Day. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Day Dividend has no effect on the direction of KraneShares Artificial i.e., KraneShares Artificial and Freedom Day go up and down completely randomly.
Pair Corralation between KraneShares Artificial and Freedom Day
Given the investment horizon of 90 days KraneShares Artificial Intelligence is expected to generate 2.15 times more return on investment than Freedom Day. However, KraneShares Artificial is 2.15 times more volatile than Freedom Day Dividend. It trades about 0.1 of its potential returns per unit of risk. Freedom Day Dividend is currently generating about 0.14 per unit of risk. If you would invest 2,480 in KraneShares Artificial Intelligence on September 4, 2024 and sell it today you would earn a total of 383.00 from holding KraneShares Artificial Intelligence or generate 15.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 38.87% |
| Values | Daily Returns |
KraneShares Artificial Intelli vs. Freedom Day Dividend
Performance |
| Timeline |
| KraneShares Artificial |
| Freedom Day Dividend |
KraneShares Artificial and Freedom Day Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Artificial and Freedom Day
The main advantage of trading using opposite KraneShares Artificial and Freedom Day positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Artificial position performs unexpectedly, Freedom Day 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 Freedom Day will offset losses from the drop in Freedom Day's long position.The idea behind KraneShares Artificial Intelligence and Freedom Day Dividend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 CEOs Directory module to screen CEOs from public companies around the world.
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