Correlation Between IShares MSCI and KraneShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and KraneShares Trust 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 IShares MSCI and KraneShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Emerging and KraneShares Trust, you can compare the effects of market volatilities on IShares MSCI and KraneShares Trust 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 IShares MSCI with a short position of KraneShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and KraneShares Trust.
Diversification Opportunities for IShares MSCI and KraneShares Trust
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and KraneShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and KraneShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Trust and IShares MSCI 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 iShares MSCI Emerging are associated (or correlated) with KraneShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Trust has no effect on the direction of IShares MSCI i.e., IShares MSCI and KraneShares Trust go up and down completely randomly.
Pair Corralation between IShares MSCI and KraneShares Trust
Considering the 90-day investment horizon iShares MSCI Emerging is expected to under-perform the KraneShares Trust. But the etf apears to be less risky and, when comparing its historical volatility, iShares MSCI Emerging is 1.44 times less risky than KraneShares Trust. The etf trades about -0.21 of its potential returns per unit of risk. The KraneShares Trust is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 2,858 in KraneShares Trust on August 23, 2024 and sell it today you would lose (139.00) from holding KraneShares Trust or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Emerging vs. KraneShares Trust
Performance |
| Timeline |
| iShares MSCI Emerging |
| KraneShares Trust |
IShares MSCI and KraneShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and KraneShares Trust
The main advantage of trading using opposite IShares MSCI and KraneShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, KraneShares Trust 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 Trust will offset losses from the drop in KraneShares Trust's long position.| IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. iShares China Large Cap | IShares MSCI vs. iShares MSCI Brazil | IShares MSCI vs. iShares Russell 2000 |
| KraneShares Trust vs. Franklin Templeton ETF | KraneShares Trust vs. Tidal Trust II | KraneShares Trust vs. Tidal Trust II | KraneShares Trust vs. iShares Dividend and |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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