Correlation Between IShares ESG and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both IShares ESG 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 ESG 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 ESG Aware and KraneShares MSCI Emerging, you can compare the effects of market volatilities on IShares ESG 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 ESG with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and KraneShares MSCI.
Diversification Opportunities for IShares ESG and KraneShares MSCI
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and KraneShares is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware 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 ESG 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 ESG Aware 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 ESG i.e., IShares ESG and KraneShares MSCI go up and down completely randomly.
Pair Corralation between IShares ESG and KraneShares MSCI
Given the investment horizon of 90 days iShares ESG Aware is expected to under-perform the KraneShares MSCI. In addition to that, IShares ESG is 1.27 times more volatile than KraneShares MSCI Emerging. It trades about -0.09 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 ESG Aware vs. KraneShares MSCI Emerging
Performance |
| Timeline |
| iShares ESG Aware |
| KraneShares MSCI Emerging |
IShares ESG and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and KraneShares MSCI
The main advantage of trading using opposite IShares ESG and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG 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 ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG USD |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |