Correlation Between KraneShares ICBCCS and GraniteShares
Can any of the company-specific risk be diversified away by investing in both KraneShares ICBCCS and GraniteShares 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 KraneShares ICBCCS and GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares ICBCCS SP and GraniteShares 3x Short, you can compare the effects of market volatilities on KraneShares ICBCCS and GraniteShares 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 KraneShares ICBCCS with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares ICBCCS and GraniteShares.
Diversification Opportunities for KraneShares ICBCCS and GraniteShares
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KraneShares and GraniteShares is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares ICBCCS SP and GraniteShares 3x Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 3x Short and KraneShares ICBCCS 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 KraneShares ICBCCS SP are associated (or correlated) with GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 3x Short has no effect on the direction of KraneShares ICBCCS i.e., KraneShares ICBCCS and GraniteShares go up and down completely randomly.
Pair Corralation between KraneShares ICBCCS and GraniteShares
Assuming the 90 days trading horizon KraneShares ICBCCS SP is expected to generate 0.12 times more return on investment than GraniteShares. However, KraneShares ICBCCS SP is 8.15 times less risky than GraniteShares. It trades about 0.25 of its potential returns per unit of risk. GraniteShares 3x Short is currently generating about -0.15 per unit of risk. If you would invest 94,910 in KraneShares ICBCCS SP on November 28, 2024 and sell it today you would earn a total of 7,350 from holding KraneShares ICBCCS SP or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares ICBCCS SP vs. GraniteShares 3x Short
Performance |
| Timeline |
| KraneShares ICBCCS |
| GraniteShares 3x Short |
KraneShares ICBCCS and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares ICBCCS and GraniteShares
The main advantage of trading using opposite KraneShares ICBCCS and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares ICBCCS position performs unexpectedly, GraniteShares 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 GraniteShares will offset losses from the drop in GraniteShares' long position.| KraneShares ICBCCS vs. KraneShares Electric Vehicles | KraneShares ICBCCS vs. KraneShares CSI China | KraneShares ICBCCS vs. KraneShares MSCI All | KraneShares ICBCCS vs. KraneShares MSCI China |
| GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Short |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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