Correlation Between KraneShares MSCI and KraneShares Trust
Can any of the company-specific risk be diversified away by investing in both KraneShares MSCI and KraneShares Trust 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 KraneShares MSCI and KraneShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares MSCI All and KraneShares Trust, you can compare the effects of market volatilities on KraneShares MSCI and KraneShares Trust 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 KraneShares MSCI with a short position of KraneShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares MSCI and KraneShares Trust.
Diversification Opportunities for KraneShares MSCI and KraneShares Trust
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between KraneShares and KraneShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares MSCI All and KraneShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Trust and KraneShares MSCI 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 KraneShares MSCI All are associated (or correlated) with KraneShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Trust has no effect on the direction of KraneShares MSCI i.e., KraneShares MSCI and KraneShares Trust go up and down completely randomly.
Pair Corralation between KraneShares MSCI and KraneShares Trust
Given the investment horizon of 90 days KraneShares MSCI All is expected to under-perform the KraneShares Trust. In addition to that, KraneShares MSCI is 1.43 times more volatile than KraneShares Trust. It trades about -0.07 of its total potential returns per unit of risk. KraneShares Trust is currently generating about -0.1 per unit of volatility. If you would invest 2,799 in KraneShares Trust on August 31, 2024 and sell it today you would lose (94.00) from holding KraneShares Trust or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares MSCI All vs. KraneShares Trust
Performance |
| Timeline |
| KraneShares MSCI All |
| KraneShares Trust |
KraneShares MSCI and KraneShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares MSCI and KraneShares Trust
The main advantage of trading using opposite KraneShares MSCI and KraneShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares MSCI position performs unexpectedly, KraneShares Trust 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 Trust will offset losses from the drop in KraneShares Trust's long position.| KraneShares MSCI vs. Xtrackers Harvest CSI | KraneShares MSCI vs. Aquagold International | KraneShares MSCI vs. Thrivent High Yield | KraneShares MSCI vs. Morningstar Unconstrained Allocation |
| KraneShares Trust vs. KraneShares MSCI One | KraneShares Trust vs. KraneShares Bosera MSCI | KraneShares Trust vs. KraneShares Artificial Intelligence | KraneShares Trust vs. KraneShares MSCI All |
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 Stocks Directory module to find actively traded stocks across global markets.
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