Correlation Between Disney and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both Disney 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 Disney and KraneShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and KraneShares MSCI All, you can compare the effects of market volatilities on Disney 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 Disney with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and KraneShares MSCI.
Diversification Opportunities for Disney and KraneShares MSCI
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Disney and KraneShares is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney 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 Disney 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 Walt Disney 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 Disney i.e., Disney and KraneShares MSCI go up and down completely randomly.
Pair Corralation between Disney and KraneShares MSCI
Considering the 90-day investment horizon Disney is expected to generate 1.71 times less return on investment than KraneShares MSCI. But when comparing it to its historical volatility, Walt Disney is 1.29 times less risky than KraneShares MSCI. It trades about 0.11 of its potential returns per unit of risk. KraneShares MSCI All is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,006 in KraneShares MSCI All on November 3, 2024 and sell it today you would earn a total of 70.00 from holding KraneShares MSCI All or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. KraneShares MSCI All
Performance |
| Timeline |
| Walt Disney |
| KraneShares MSCI All |
Disney and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and KraneShares MSCI
The main advantage of trading using opposite Disney and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.| Disney vs. Liberty Media | Disney vs. Atlanta Braves Holdings, | Disney vs. News Corp B | Disney vs. News Corp A |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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