Correlation Between ARK Next and KraneShares
Can any of the company-specific risk be diversified away by investing in both ARK Next and KraneShares 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 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, you can compare the effects of market volatilities on ARK Next and KraneShares 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Next and KraneShares.
Diversification Opportunities for ARK Next and KraneShares
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ARK and KraneShares is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ARK Next Generation and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares has no effect on the direction of ARK Next i.e., ARK Next and KraneShares go up and down completely randomly.
Pair Corralation between ARK Next and KraneShares
If you would invest 8,978 in ARK Next Generation on August 28, 2024 and sell it today you would earn a total of 1,660 from holding ARK Next Generation or generate 18.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
ARK Next Generation vs. KraneShares
Performance |
| Timeline |
| ARK Next Generation |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
ARK Next and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARK Next and KraneShares
The main advantage of trading using opposite ARK Next and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK Next position performs unexpectedly, KraneShares 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 will offset losses from the drop in KraneShares' 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 vs. KraneShares SSE STAR | KraneShares vs. KraneShares MSCI China | KraneShares vs. KraneShares MSCI All |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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