Correlation Between IShares Gold and KraneShares California
Can any of the company-specific risk be diversified away by investing in both IShares Gold and KraneShares California 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 Gold and KraneShares California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Gold Trust and KraneShares California Carbon, you can compare the effects of market volatilities on IShares Gold and KraneShares California 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 Gold with a short position of KraneShares California. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Gold and KraneShares California.
Diversification Opportunities for IShares Gold and KraneShares California
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and KraneShares is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares Gold Trust and KraneShares California Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares California and IShares Gold 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 Gold Trust are associated (or correlated) with KraneShares California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares California has no effect on the direction of IShares Gold i.e., IShares Gold and KraneShares California go up and down completely randomly.
Pair Corralation between IShares Gold and KraneShares California
Considering the 90-day investment horizon iShares Gold Trust is expected to generate 0.63 times more return on investment than KraneShares California. However, iShares Gold Trust is 1.58 times less risky than KraneShares California. It trades about 0.1 of its potential returns per unit of risk. KraneShares California Carbon is currently generating about -0.03 per unit of risk. If you would invest 4,439 in iShares Gold Trust on September 1, 2024 and sell it today you would earn a total of 586.00 from holding iShares Gold Trust or generate 13.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
iShares Gold Trust vs. KraneShares California Carbon
Performance |
| Timeline |
| iShares Gold Trust |
| KraneShares California |
IShares Gold and KraneShares California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Gold and KraneShares California
The main advantage of trading using opposite IShares Gold and KraneShares California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Gold position performs unexpectedly, KraneShares California 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 California will offset losses from the drop in KraneShares California's long position.| IShares Gold vs. iShares Silver Trust | IShares Gold vs. VanEck Gold Miners | IShares Gold vs. SPDR Gold Shares | IShares Gold vs. Invesco DB Commodity |
| KraneShares California vs. Goldman Sachs Physical | KraneShares California vs. iShares Gold Trust | KraneShares California vs. iShares Bloomberg Roll |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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