Correlation Between Invesco CurrencyShares and KraneShares SSE
Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and KraneShares SSE 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 Invesco CurrencyShares and KraneShares SSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco CurrencyShares Japanese and KraneShares SSE STAR, you can compare the effects of market volatilities on Invesco CurrencyShares and KraneShares SSE 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 Invesco CurrencyShares with a short position of KraneShares SSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and KraneShares SSE.
Diversification Opportunities for Invesco CurrencyShares and KraneShares SSE
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and KraneShares is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and KraneShares SSE STAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares SSE STAR and Invesco CurrencyShares 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 Invesco CurrencyShares Japanese are associated (or correlated) with KraneShares SSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares SSE STAR has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and KraneShares SSE go up and down completely randomly.
Pair Corralation between Invesco CurrencyShares and KraneShares SSE
Considering the 90-day investment horizon Invesco CurrencyShares is expected to generate 1.64 times less return on investment than KraneShares SSE. But when comparing it to its historical volatility, Invesco CurrencyShares Japanese is 4.55 times less risky than KraneShares SSE. It trades about 0.09 of its potential returns per unit of risk. KraneShares SSE STAR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,330 in KraneShares SSE STAR on September 1, 2024 and sell it today you would earn a total of 15.00 from holding KraneShares SSE STAR or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco CurrencyShares Japanes vs. KraneShares SSE STAR
Performance |
| Timeline |
| Invesco CurrencyShares |
| KraneShares SSE STAR |
Invesco CurrencyShares and KraneShares SSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco CurrencyShares and KraneShares SSE
The main advantage of trading using opposite Invesco CurrencyShares and KraneShares SSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco CurrencyShares position performs unexpectedly, KraneShares SSE 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 SSE will offset losses from the drop in KraneShares SSE's long position.| Invesco CurrencyShares vs. Invesco CurrencyShares Canadian | Invesco CurrencyShares vs. Invesco CurrencyShares British |
| KraneShares SSE vs. KraneShares MSCI All | KraneShares SSE vs. KraneShares Bosera MSCI | KraneShares SSE vs. KraneShares MSCI China |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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