Correlation Between KraneShares ICBCCS and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both KraneShares ICBCCS 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 KraneShares ICBCCS and KraneShares MSCI 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 KraneShares MSCI All, you can compare the effects of market volatilities on KraneShares ICBCCS 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 KraneShares ICBCCS with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares ICBCCS and KraneShares MSCI.
Diversification Opportunities for KraneShares ICBCCS and KraneShares MSCI
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KraneShares and KraneShares is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares ICBCCS SP and KraneShares MSCI All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI All 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 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 All has no effect on the direction of KraneShares ICBCCS i.e., KraneShares ICBCCS and KraneShares MSCI go up and down completely randomly.
Pair Corralation between KraneShares ICBCCS and KraneShares MSCI
Assuming the 90 days trading horizon KraneShares ICBCCS is expected to generate 1.02 times less return on investment than KraneShares MSCI. But when comparing it to its historical volatility, KraneShares ICBCCS SP is 1.21 times less risky than KraneShares MSCI. It trades about 0.23 of its potential returns per unit of risk. KraneShares MSCI All is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,374 in KraneShares MSCI All on November 18, 2024 and sell it today you would earn a total of 75.00 from holding KraneShares MSCI All or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
KraneShares ICBCCS SP vs. KraneShares MSCI All
Performance |
| Timeline |
| KraneShares ICBCCS |
| KraneShares MSCI All |
KraneShares ICBCCS and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares ICBCCS and KraneShares MSCI
The main advantage of trading using opposite KraneShares ICBCCS and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares ICBCCS 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.| KraneShares ICBCCS vs. Vanguard FTSE Developed | KraneShares ICBCCS vs. Leverage Shares 2x | KraneShares ICBCCS vs. Amundi Index Solutions | KraneShares ICBCCS vs. Amundi Index Solutions |
| KraneShares MSCI vs. Leverage Shares 3x | KraneShares MSCI vs. WisdomTree Natural Gas | KraneShares MSCI vs. Leverage Shares 3x | KraneShares MSCI vs. Leverage Shares 3x |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |