Correlation Between IShares IBoxx and KraneShares Asia
Can any of the company-specific risk be diversified away by investing in both IShares IBoxx and KraneShares Asia 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 IBoxx and KraneShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBoxx High and KraneShares Asia Pacific, you can compare the effects of market volatilities on IShares IBoxx and KraneShares Asia 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 IBoxx with a short position of KraneShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBoxx and KraneShares Asia.
Diversification Opportunities for IShares IBoxx and KraneShares Asia
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and KraneShares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBoxx High and KraneShares Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Asia Pacific and IShares IBoxx 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 iBoxx High are associated (or correlated) with KraneShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Asia Pacific has no effect on the direction of IShares IBoxx i.e., IShares IBoxx and KraneShares Asia go up and down completely randomly.
Pair Corralation between IShares IBoxx and KraneShares Asia
Considering the 90-day investment horizon IShares IBoxx is expected to generate 1.33 times less return on investment than KraneShares Asia. In addition to that, IShares IBoxx is 1.26 times more volatile than KraneShares Asia Pacific. It trades about 0.14 of its total potential returns per unit of risk. KraneShares Asia Pacific is currently generating about 0.23 per unit of volatility. If you would invest 2,203 in KraneShares Asia Pacific on September 12, 2024 and sell it today you would earn a total of 289.00 from holding KraneShares Asia Pacific or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBoxx High vs. KraneShares Asia Pacific
Performance |
| Timeline |
| iShares iBoxx High |
| KraneShares Asia Pacific |
IShares IBoxx and KraneShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBoxx and KraneShares Asia
The main advantage of trading using opposite IShares IBoxx and KraneShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBoxx position performs unexpectedly, KraneShares Asia 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 Asia will offset losses from the drop in KraneShares Asia's long position.| IShares IBoxx vs. iShares iBoxx Investment | IShares IBoxx vs. SPDR Bloomberg High | IShares IBoxx vs. iShares TIPS Bond | IShares IBoxx vs. iShares 20 Year |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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