Correlation Between EMQQ Emerging and KraneShares California
Can any of the company-specific risk be diversified away by investing in both EMQQ Emerging 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 EMQQ Emerging and KraneShares California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMQQ The Emerging and KraneShares California Carbon, you can compare the effects of market volatilities on EMQQ Emerging 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 EMQQ Emerging with a short position of KraneShares California. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMQQ Emerging and KraneShares California.
Diversification Opportunities for EMQQ Emerging and KraneShares California
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMQQ and KraneShares is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding EMQQ The Emerging and KraneShares California Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares California and EMQQ Emerging 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 EMQQ The Emerging 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 EMQQ Emerging i.e., EMQQ Emerging and KraneShares California go up and down completely randomly.
Pair Corralation between EMQQ Emerging and KraneShares California
Given the investment horizon of 90 days EMQQ The Emerging is expected to generate 0.68 times more return on investment than KraneShares California. However, EMQQ The Emerging is 1.46 times less risky than KraneShares California. It trades about -0.12 of its potential returns per unit of risk. KraneShares California Carbon is currently generating about -0.22 per unit of risk. If you would invest 3,826 in EMQQ The Emerging on August 26, 2024 and sell it today you would lose (130.00) from holding EMQQ The Emerging or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMQQ The Emerging vs. KraneShares California Carbon
Performance |
| Timeline |
| EMQQ The Emerging |
| KraneShares California |
EMQQ Emerging and KraneShares California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMQQ Emerging and KraneShares California
The main advantage of trading using opposite EMQQ Emerging and KraneShares California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMQQ Emerging 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.| EMQQ Emerging vs. Invesco PureBeta MSCI | EMQQ Emerging vs. Aquagold International | EMQQ Emerging vs. Morningstar Unconstrained Allocation | EMQQ Emerging vs. High Yield Municipal Fund |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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