Correlation Between Breakwave Dry and KraneShares European
Can any of the company-specific risk be diversified away by investing in both Breakwave Dry and KraneShares European 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 Breakwave Dry and KraneShares European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Breakwave Dry Bulk and KraneShares European Carbon, you can compare the effects of market volatilities on Breakwave Dry and KraneShares European 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 Breakwave Dry with a short position of KraneShares European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Breakwave Dry and KraneShares European.
Diversification Opportunities for Breakwave Dry and KraneShares European
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Breakwave and KraneShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Breakwave Dry Bulk and KraneShares European Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares European and Breakwave Dry 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 Breakwave Dry Bulk are associated (or correlated) with KraneShares European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares European has no effect on the direction of Breakwave Dry i.e., Breakwave Dry and KraneShares European go up and down completely randomly.
Pair Corralation between Breakwave Dry and KraneShares European
Given the investment horizon of 90 days Breakwave Dry Bulk is expected to under-perform the KraneShares European. In addition to that, Breakwave Dry is 2.21 times more volatile than KraneShares European Carbon. It trades about -0.02 of its total potential returns per unit of risk. KraneShares European Carbon is currently generating about 0.04 per unit of volatility. If you would invest 2,129 in KraneShares European Carbon on November 27, 2024 and sell it today you would earn a total of 78.00 from holding KraneShares European Carbon or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Breakwave Dry Bulk vs. KraneShares European Carbon
Performance |
| Timeline |
| Breakwave Dry Bulk |
| KraneShares European |
Breakwave Dry and KraneShares European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Breakwave Dry and KraneShares European
The main advantage of trading using opposite Breakwave Dry and KraneShares European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Breakwave Dry position performs unexpectedly, KraneShares European 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 European will offset losses from the drop in KraneShares European's long position.| Breakwave Dry vs. SonicShares Global Shipping | Breakwave Dry vs. KraneShares Global Carbon | Breakwave Dry vs. iPath Series B | Breakwave Dry vs. Danaos |
| KraneShares European vs. KraneShares California Carbon | KraneShares European vs. KraneShares Global Carbon | KraneShares European vs. iPath Series B |
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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