Correlation Between KraneShares Electric and Global X
Can any of the company-specific risk be diversified away by investing in both KraneShares Electric and Global X 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 Global X 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 Global X Autonomous, you can compare the effects of market volatilities on KraneShares Electric and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Electric and Global X.
Diversification Opportunities for KraneShares Electric and Global X
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KraneShares and Global is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Electric Vehicles and Global X Autonomous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Autonomous 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Autonomous has no effect on the direction of KraneShares Electric i.e., KraneShares Electric and Global X go up and down completely randomly.
Pair Corralation between KraneShares Electric and Global X
Given the investment horizon of 90 days KraneShares Electric Vehicles is expected to under-perform the Global X. In addition to that, KraneShares Electric is 2.22 times more volatile than Global X Autonomous. It trades about -0.02 of its total potential returns per unit of risk. Global X Autonomous is currently generating about 0.01 per unit of volatility. If you would invest 2,336 in Global X Autonomous on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Global X Autonomous or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares Electric Vehicles vs. Global X Autonomous
Performance |
| Timeline |
| KraneShares Electric |
| Global X Autonomous |
KraneShares Electric and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Electric and Global X
The main advantage of trading using opposite KraneShares Electric and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Electric position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| KraneShares Electric vs. SPDR SP Kensho | KraneShares Electric vs. iShares Self Driving EV | KraneShares Electric vs. Amplify Lithium Battery | KraneShares Electric vs. Global X Autonomous |
| Global X vs. iShares Self Driving EV | Global X vs. KraneShares Electric Vehicles | Global X vs. Global X Lithium | Global X vs. SPDR SP Kensho |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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