Correlation Between IShares MSCI and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 IShares MSCI and KraneShares MSCI 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 MSCI Emerging, you can compare the effects of market volatilities on IShares MSCI 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 IShares MSCI with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and KraneShares MSCI.
Diversification Opportunities for IShares MSCI and KraneShares MSCI
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and KraneShares is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and KraneShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI Emerging 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 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 Emerging has no effect on the direction of IShares MSCI i.e., IShares MSCI and KraneShares MSCI go up and down completely randomly.
Pair Corralation between IShares MSCI and KraneShares MSCI
Considering the 90-day investment horizon iShares MSCI Emerging is expected to under-perform the KraneShares MSCI. In addition to that, IShares MSCI is 1.26 times more volatile than KraneShares MSCI Emerging. It trades about -0.12 of its total potential returns per unit of risk. KraneShares MSCI Emerging is currently generating about -0.11 per unit of volatility. If you would invest 3,015 in KraneShares MSCI Emerging on September 1, 2024 and sell it today you would lose (59.00) from holding KraneShares MSCI Emerging or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares MSCI Emerging vs. KraneShares MSCI Emerging
Performance |
| Timeline |
| iShares MSCI Emerging |
| KraneShares MSCI Emerging |
IShares MSCI and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and KraneShares MSCI
The main advantage of trading using opposite IShares MSCI and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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.| 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 MSCI vs. Xtrackers MSCI Emerging | KraneShares MSCI vs. FlexShares Morningstar Emerging | KraneShares MSCI vs. First Trust Emerging |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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