Correlation Between MicroSectors FANG and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both MicroSectors FANG 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 MicroSectors FANG and KraneShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectors FANG Index and KraneShares MSCI One, you can compare the effects of market volatilities on MicroSectors FANG 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 MicroSectors FANG with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and KraneShares MSCI.
Diversification Opportunities for MicroSectors FANG and KraneShares MSCI
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MicroSectors and KraneShares is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index and KraneShares MSCI One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI One and MicroSectors FANG 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 MicroSectors FANG Index 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 One has no effect on the direction of MicroSectors FANG i.e., MicroSectors FANG and KraneShares MSCI go up and down completely randomly.
Pair Corralation between MicroSectors FANG and KraneShares MSCI
Given the investment horizon of 90 days MicroSectors FANG Index is expected to under-perform the KraneShares MSCI. In addition to that, MicroSectors FANG is 4.31 times more volatile than KraneShares MSCI One. It trades about -0.1 of its total potential returns per unit of risk. KraneShares MSCI One is currently generating about 0.05 per unit of volatility. If you would invest 1,969 in KraneShares MSCI One on August 26, 2024 and sell it today you would earn a total of 238.00 from holding KraneShares MSCI One or generate 12.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroSectors FANG Index vs. KraneShares MSCI One
Performance |
| Timeline |
| MicroSectors FANG Index |
| KraneShares MSCI One |
MicroSectors FANG and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors FANG and KraneShares MSCI
The main advantage of trading using opposite MicroSectors FANG and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG 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.| MicroSectors FANG vs. MicroSectors FANG Index | MicroSectors FANG vs. Direxion Daily Semiconductor | MicroSectors FANG vs. Direxion Daily Technology | MicroSectors FANG vs. Direxion Daily SP |
| KraneShares MSCI vs. iShares Dividend and | KraneShares MSCI vs. Martin Currie Sustainable | KraneShares MSCI vs. VictoryShares THB Mid | KraneShares MSCI vs. Mast Global Battery |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |