Correlation Between Exchange Traded and KraneShares California
Can any of the company-specific risk be diversified away by investing in both Exchange Traded and KraneShares California 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 Exchange Traded and KraneShares California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Traded Concepts and KraneShares California Carbon, you can compare the effects of market volatilities on Exchange Traded and KraneShares California 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 Exchange Traded with a short position of KraneShares California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and KraneShares California.
Diversification Opportunities for Exchange Traded and KraneShares California
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exchange and KraneShares is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and KraneShares California Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares California and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with KraneShares California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares California has no effect on the direction of Exchange Traded i.e., Exchange Traded and KraneShares California go up and down completely randomly.
Pair Corralation between Exchange Traded and KraneShares California
Given the investment horizon of 90 days Exchange Traded is expected to generate 3.89 times less return on investment than KraneShares California. But when comparing it to its historical volatility, Exchange Traded Concepts is 1.46 times less risky than KraneShares California. It trades about 0.01 of its potential returns per unit of risk. KraneShares California Carbon is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,772 in KraneShares California Carbon on August 30, 2024 and sell it today you would earn a total of 253.00 from holding KraneShares California Carbon or generate 14.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
Exchange Traded Concepts vs. KraneShares California Carbon
Performance |
| Timeline |
| Exchange Traded Concepts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KraneShares California |
Exchange Traded and KraneShares California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Traded and KraneShares California
The main advantage of trading using opposite Exchange Traded and KraneShares California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded position performs unexpectedly, KraneShares California 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 California will offset losses from the drop in KraneShares California's long position.| Exchange Traded vs. American Financial Group | Exchange Traded vs. Maiden Holdings North | Exchange Traded vs. Entergy New Orleans | Exchange Traded vs. Newtek Business Services |
| KraneShares California vs. KraneShares European Carbon | KraneShares California vs. iPath Series B | KraneShares California vs. KraneShares Global Carbon |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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