Correlation Between IPath Series and KraneShares European
Can any of the company-specific risk be diversified away by investing in both IPath Series and KraneShares European 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 IPath Series and KraneShares European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPath Series B and KraneShares European Carbon, you can compare the effects of market volatilities on IPath Series and KraneShares European 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 IPath Series with a short position of KraneShares European. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Series and KraneShares European.
Diversification Opportunities for IPath Series and KraneShares European
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IPath and KraneShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B and KraneShares European Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares European and IPath Series 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 iPath Series B are associated (or correlated) with KraneShares European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares European has no effect on the direction of IPath Series i.e., IPath Series and KraneShares European go up and down completely randomly.
Pair Corralation between IPath Series and KraneShares European
Considering the 90-day investment horizon iPath Series B is expected to generate 0.91 times more return on investment than KraneShares European. However, iPath Series B is 1.1 times less risky than KraneShares European. It trades about 0.07 of its potential returns per unit of risk. KraneShares European Carbon is currently generating about 0.0 per unit of risk. If you would invest 2,663 in iPath Series B on August 30, 2024 and sell it today you would earn a total of 65.00 from holding iPath Series B or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
iPath Series B vs. KraneShares European Carbon
Performance |
| Timeline |
| iPath Series B |
| KraneShares European |
IPath Series and KraneShares European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Series and KraneShares European
The main advantage of trading using opposite IPath Series and KraneShares European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Series position performs unexpectedly, KraneShares European 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 European will offset losses from the drop in KraneShares European's long position.| IPath Series vs. KraneShares Global Carbon | IPath Series vs. KraneShares European Carbon | IPath Series vs. KraneShares California Carbon | IPath Series vs. Breakwave Dry Bulk |
| KraneShares European vs. KraneShares California Carbon | KraneShares European vs. KraneShares Global Carbon | KraneShares European vs. iPath Series B |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |