Correlation Between KraneShares Electric and KraneShares ICBCCS
Can any of the company-specific risk be diversified away by investing in both KraneShares Electric and KraneShares ICBCCS 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 Electric and KraneShares ICBCCS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Electric Vehicles and KraneShares ICBCCS SP, you can compare the effects of market volatilities on KraneShares Electric and KraneShares ICBCCS 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 Electric with a short position of KraneShares ICBCCS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Electric and KraneShares ICBCCS.
Diversification Opportunities for KraneShares Electric and KraneShares ICBCCS
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KraneShares and KraneShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Electric Vehicles and KraneShares ICBCCS SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares ICBCCS and KraneShares Electric 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 Electric Vehicles are associated (or correlated) with KraneShares ICBCCS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares ICBCCS has no effect on the direction of KraneShares Electric i.e., KraneShares Electric and KraneShares ICBCCS go up and down completely randomly.
Pair Corralation between KraneShares Electric and KraneShares ICBCCS
Assuming the 90 days trading horizon KraneShares Electric Vehicles is expected to under-perform the KraneShares ICBCCS. In addition to that, KraneShares Electric is 1.38 times more volatile than KraneShares ICBCCS SP. It trades about -0.03 of its total potential returns per unit of risk. KraneShares ICBCCS SP is currently generating about -0.04 per unit of volatility. If you would invest 94,785 in KraneShares ICBCCS SP on August 30, 2024 and sell it today you would lose (1,810) from holding KraneShares ICBCCS SP or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares Electric Vehicles vs. KraneShares ICBCCS SP
Performance |
| Timeline |
| KraneShares Electric |
| KraneShares ICBCCS |
KraneShares Electric and KraneShares ICBCCS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Electric and KraneShares ICBCCS
The main advantage of trading using opposite KraneShares Electric and KraneShares ICBCCS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Electric position performs unexpectedly, KraneShares ICBCCS 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 ICBCCS will offset losses from the drop in KraneShares ICBCCS's long position.| KraneShares Electric vs. Leverage Shares 3x | KraneShares Electric vs. GraniteShares 3x Short | KraneShares Electric vs. WisdomTree Natural Gas | KraneShares Electric vs. Leverage Shares 3x |
| KraneShares ICBCCS vs. GraniteShares 3x Short | KraneShares ICBCCS vs. WisdomTree Natural Gas | KraneShares ICBCCS vs. Leverage Shares 3x | KraneShares ICBCCS vs. WisdomTree Natural Gas |
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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