Correlation Between VanEck Crypto and KraneShares Electric
Can any of the company-specific risk be diversified away by investing in both VanEck Crypto and KraneShares Electric 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 Crypto and KraneShares Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Crypto Blockchain and KraneShares Electric Vehicles, you can compare the effects of market volatilities on VanEck Crypto and KraneShares Electric 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 Crypto with a short position of KraneShares Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Crypto and KraneShares Electric.
Diversification Opportunities for VanEck Crypto and KraneShares Electric
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VanEck and KraneShares is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Crypto Blockchain and KraneShares Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Electric and VanEck Crypto 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 Crypto Blockchain are associated (or correlated) with KraneShares Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Electric has no effect on the direction of VanEck Crypto i.e., VanEck Crypto and KraneShares Electric go up and down completely randomly.
Pair Corralation between VanEck Crypto and KraneShares Electric
Assuming the 90 days trading horizon VanEck Crypto Blockchain is expected to generate 2.85 times more return on investment than KraneShares Electric. However, VanEck Crypto is 2.85 times more volatile than KraneShares Electric Vehicles. It trades about 0.21 of its potential returns per unit of risk. KraneShares Electric Vehicles is currently generating about -0.01 per unit of risk. If you would invest 988.00 in VanEck Crypto Blockchain on August 27, 2024 and sell it today you would earn a total of 243.00 from holding VanEck Crypto Blockchain or generate 24.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Crypto Blockchain vs. KraneShares Electric Vehicles
Performance |
| Timeline |
| VanEck Crypto Blockchain |
| KraneShares Electric |
VanEck Crypto and KraneShares Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Crypto and KraneShares Electric
The main advantage of trading using opposite VanEck Crypto and KraneShares Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Crypto position performs unexpectedly, KraneShares Electric 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 Electric will offset losses from the drop in KraneShares Electric's long position.| VanEck Crypto vs. Leverage Shares 3x | VanEck Crypto vs. WisdomTree SP 500 | VanEck Crypto vs. WisdomTree Silver 3x | VanEck Crypto vs. Leverage Shares 3x |
| KraneShares Electric vs. Leverage Shares 3x | KraneShares Electric vs. WisdomTree SP 500 | KraneShares Electric vs. WisdomTree Silver 3x | KraneShares Electric 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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