Correlation Between VanEck China and KBND
Can any of the company-specific risk be diversified away by investing in both VanEck China and KBND 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 VanEck China and KBND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck China Bond and KBND, you can compare the effects of market volatilities on VanEck China and KBND 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 VanEck China with a short position of KBND. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck China and KBND.
Diversification Opportunities for VanEck China and KBND
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VanEck and KBND is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VanEck China Bond and KBND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBND and VanEck China 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 VanEck China Bond are associated (or correlated) with KBND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBND has no effect on the direction of VanEck China i.e., VanEck China and KBND go up and down completely randomly.
Pair Corralation between VanEck China and KBND
If you would invest 2,133 in VanEck China Bond on November 9, 2024 and sell it today you would earn a total of 77.00 from holding VanEck China Bond or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
VanEck China Bond vs. KBND
Performance |
| Timeline |
| VanEck China Bond |
| KBND |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
VanEck China and KBND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck China and KBND
The main advantage of trading using opposite VanEck China and KBND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck China position performs unexpectedly, KBND 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 KBND will offset losses from the drop in KBND's long position.| VanEck China vs. SPDR Bloomberg Emerging | VanEck China vs. Vanguard Emerging Markets | VanEck China vs. SPDR Bloomberg Barclays | VanEck China vs. VanEck JP Morgan |
| KBND vs. VanEck China Bond | KBND vs. KraneShares Asia Pacific | KBND vs. KraneShares MSCI All | KBND vs. First Trust Long |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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