Correlation Between Bank of America and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both Bank of America and KraneShares MSCI 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 Bank of America and KraneShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and KraneShares MSCI Emerging, you can compare the effects of market volatilities on Bank of America and KraneShares MSCI 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 Bank of America with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and KraneShares MSCI.
Diversification Opportunities for Bank of America and KraneShares MSCI
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and KraneShares is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and KraneShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI Emerging and Bank of America 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 Bank of America are associated (or correlated) with KraneShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares MSCI Emerging has no effect on the direction of Bank of America i.e., Bank of America and KraneShares MSCI go up and down completely randomly.
Pair Corralation between Bank of America and KraneShares MSCI
Considering the 90-day investment horizon Bank of America is expected to under-perform the KraneShares MSCI. In addition to that, Bank of America is 1.66 times more volatile than KraneShares MSCI Emerging. It trades about -0.16 of its total potential returns per unit of risk. KraneShares MSCI Emerging is currently generating about -0.01 per unit of volatility. If you would invest 2,779 in KraneShares MSCI Emerging on December 11, 2024 and sell it today you would lose (19.00) from holding KraneShares MSCI Emerging or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. KraneShares MSCI Emerging
Performance |
| Timeline |
| Bank of America |
| KraneShares MSCI Emerging |
Bank of America and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and KraneShares MSCI
The main advantage of trading using opposite Bank of America and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, KraneShares MSCI 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 MSCI will offset losses from the drop in KraneShares MSCI's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC |
| KraneShares MSCI vs. KraneShares MSCI All | KraneShares MSCI vs. Columbia EM Core | KraneShares MSCI vs. KraneShares Emerging Markets | KraneShares MSCI vs. KraneShares MSCI One |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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