Correlation Between IShares Gold and KraneShares Global
Can any of the company-specific risk be diversified away by investing in both IShares Gold and KraneShares Global 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 Global 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 Global Carbon, you can compare the effects of market volatilities on IShares Gold and KraneShares Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Gold and KraneShares Global.
Diversification Opportunities for IShares Gold and KraneShares Global
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and KraneShares is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding iShares Gold Trust and KraneShares Global Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Global Carbon 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Global Carbon has no effect on the direction of IShares Gold i.e., IShares Gold and KraneShares Global go up and down completely randomly.
Pair Corralation between IShares Gold and KraneShares Global
Given the investment horizon of 90 days iShares Gold Trust is expected to under-perform the KraneShares Global. But the etf apears to be less risky and, when comparing its historical volatility, iShares Gold Trust is 1.01 times less risky than KraneShares Global. The etf trades about -0.11 of its potential returns per unit of risk. The KraneShares Global Carbon is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 3,163 in KraneShares Global Carbon on September 1, 2024 and sell it today you would lose (41.00) from holding KraneShares Global Carbon or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Gold Trust vs. KraneShares Global Carbon
Performance |
| Timeline |
| iShares Gold Trust |
| KraneShares Global Carbon |
IShares Gold and KraneShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Gold and KraneShares Global
The main advantage of trading using opposite IShares Gold and KraneShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Gold position performs unexpectedly, KraneShares Global 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 Global will offset losses from the drop in KraneShares Global's long position.| IShares Gold vs. SPDR Gold MiniShares | IShares Gold vs. Goldman Sachs Physical | IShares Gold vs. GraniteShares Gold Trust | IShares Gold vs. VanEck Merk Gold |
| KraneShares Global vs. Goldman Sachs Physical | KraneShares Global vs. iShares Gold Trust | KraneShares Global 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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