Correlation Between International Business and KraneShares
Can any of the company-specific risk be diversified away by investing in both International Business and KraneShares 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 International Business and KraneShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and KraneShares, you can compare the effects of market volatilities on International Business and KraneShares 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 International Business with a short position of KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and KraneShares.
Diversification Opportunities for International Business and KraneShares
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and KraneShares is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares and International Business 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 International Business Machines are associated (or correlated) with KraneShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares has no effect on the direction of International Business i.e., International Business and KraneShares go up and down completely randomly.
Pair Corralation between International Business and KraneShares
Considering the 90-day investment horizon International Business Machines is expected to generate 0.72 times more return on investment than KraneShares. However, International Business Machines is 1.39 times less risky than KraneShares. It trades about 0.09 of its potential returns per unit of risk. KraneShares is currently generating about 0.0 per unit of risk. If you would invest 13,844 in International Business Machines on September 3, 2024 and sell it today you would earn a total of 8,897 from holding International Business Machines or generate 64.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.91% |
| Values | Daily Returns |
International Business Machine vs. KraneShares
Performance |
| Timeline |
| International Business |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
International Business and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and KraneShares
The main advantage of trading using opposite International Business and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, KraneShares 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 will offset losses from the drop in KraneShares' long position.| International Business vs. Partner Communications | International Business vs. Merck Company | International Business vs. Western Midstream Partners | International Business vs. Edgewise Therapeutics |
| KraneShares vs. Franklin FTSE South | KraneShares vs. Franklin FTSE Japan | KraneShares vs. Franklin FTSE India | KraneShares vs. Franklin FTSE Brazil |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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