Correlation Between Edinburgh Worldwide and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both Edinburgh Worldwide 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 Edinburgh Worldwide and KraneShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edinburgh Worldwide Investment and KraneShares MSCI China, you can compare the effects of market volatilities on Edinburgh Worldwide 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 Edinburgh Worldwide with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edinburgh Worldwide and KraneShares MSCI.
Diversification Opportunities for Edinburgh Worldwide and KraneShares MSCI
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Edinburgh and KraneShares is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Edinburgh Worldwide Investment and KraneShares MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI China and Edinburgh Worldwide 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 Edinburgh Worldwide Investment 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 China has no effect on the direction of Edinburgh Worldwide i.e., Edinburgh Worldwide and KraneShares MSCI go up and down completely randomly.
Pair Corralation between Edinburgh Worldwide and KraneShares MSCI
Assuming the 90 days trading horizon Edinburgh Worldwide Investment is expected to generate 0.63 times more return on investment than KraneShares MSCI. However, Edinburgh Worldwide Investment is 1.59 times less risky than KraneShares MSCI. It trades about 0.14 of its potential returns per unit of risk. KraneShares MSCI China is currently generating about 0.04 per unit of risk. If you would invest 14,460 in Edinburgh Worldwide Investment on August 30, 2024 and sell it today you would earn a total of 3,540 from holding Edinburgh Worldwide Investment or generate 24.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edinburgh Worldwide Investment vs. KraneShares MSCI China
Performance |
| Timeline |
| Edinburgh Worldwide |
| KraneShares MSCI China |
Edinburgh Worldwide and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edinburgh Worldwide and KraneShares MSCI
The main advantage of trading using opposite Edinburgh Worldwide and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edinburgh Worldwide 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.| Edinburgh Worldwide vs. BlackRock Latin American | Edinburgh Worldwide vs. VinaCapital Vietnam Opportunity | Edinburgh Worldwide vs. iShares MSCI Japan | Edinburgh Worldwide vs. Amundi EUR High |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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