Correlation Between ARK Next and KraneShares Artificial
Can any of the company-specific risk be diversified away by investing in both ARK Next and KraneShares Artificial 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 ARK Next and KraneShares Artificial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARK Next Generation and KraneShares Artificial Intelligence, you can compare the effects of market volatilities on ARK Next and KraneShares Artificial 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 ARK Next with a short position of KraneShares Artificial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Next and KraneShares Artificial.
Diversification Opportunities for ARK Next and KraneShares Artificial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ARK and KraneShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding ARK Next Generation and KraneShares Artificial Intelli in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Artificial and ARK Next 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 ARK Next Generation are associated (or correlated) with KraneShares Artificial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Artificial has no effect on the direction of ARK Next i.e., ARK Next and KraneShares Artificial go up and down completely randomly.
Pair Corralation between ARK Next and KraneShares Artificial
Given the investment horizon of 90 days ARK Next Generation is expected to generate 1.19 times more return on investment than KraneShares Artificial. However, ARK Next is 1.19 times more volatile than KraneShares Artificial Intelligence. It trades about 0.1 of its potential returns per unit of risk. KraneShares Artificial Intelligence is currently generating about 0.09 per unit of risk. If you would invest 7,079 in ARK Next Generation on September 4, 2024 and sell it today you would earn a total of 3,943 from holding ARK Next Generation or generate 55.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 38.87% |
| Values | Daily Returns |
ARK Next Generation vs. KraneShares Artificial Intelli
Performance |
| Timeline |
| ARK Next Generation |
| KraneShares Artificial |
ARK Next and KraneShares Artificial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARK Next and KraneShares Artificial
The main advantage of trading using opposite ARK Next and KraneShares Artificial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK Next position performs unexpectedly, KraneShares Artificial 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 Artificial will offset losses from the drop in KraneShares Artificial's long position.| ARK Next vs. ARK Autonomous Technology | ARK Next vs. ARK Genomic Revolution | ARK Next vs. ARK Fintech Innovation | ARK Next vs. ARK Innovation ETF |
| KraneShares Artificial vs. iShares Dividend and | KraneShares Artificial vs. Martin Currie Sustainable | KraneShares Artificial vs. VictoryShares THB Mid | KraneShares Artificial vs. Mast Global Battery |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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