Correlation Between KraneShares Bosera and Rayliant Quantamental
Can any of the company-specific risk be diversified away by investing in both KraneShares Bosera and Rayliant Quantamental 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 Bosera and Rayliant Quantamental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Bosera MSCI and Rayliant Quantamental China, you can compare the effects of market volatilities on KraneShares Bosera and Rayliant Quantamental 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 Bosera with a short position of Rayliant Quantamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Bosera and Rayliant Quantamental.
Diversification Opportunities for KraneShares Bosera and Rayliant Quantamental
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KraneShares and Rayliant is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Bosera MSCI and Rayliant Quantamental China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rayliant Quantamental and KraneShares Bosera 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 Bosera MSCI are associated (or correlated) with Rayliant Quantamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rayliant Quantamental has no effect on the direction of KraneShares Bosera i.e., KraneShares Bosera and Rayliant Quantamental go up and down completely randomly.
Pair Corralation between KraneShares Bosera and Rayliant Quantamental
Considering the 90-day investment horizon KraneShares Bosera is expected to generate 2.31 times less return on investment than Rayliant Quantamental. But when comparing it to its historical volatility, KraneShares Bosera MSCI is 1.12 times less risky than Rayliant Quantamental. It trades about 0.05 of its potential returns per unit of risk. Rayliant Quantamental China is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,376 in Rayliant Quantamental China on November 9, 2024 and sell it today you would earn a total of 34.00 from holding Rayliant Quantamental China or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares Bosera MSCI vs. Rayliant Quantamental China
Performance |
| Timeline |
| KraneShares Bosera MSCI |
| Rayliant Quantamental |
KraneShares Bosera and Rayliant Quantamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Bosera and Rayliant Quantamental
The main advantage of trading using opposite KraneShares Bosera and Rayliant Quantamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Bosera position performs unexpectedly, Rayliant Quantamental 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 Rayliant Quantamental will offset losses from the drop in Rayliant Quantamental's long position.| KraneShares Bosera vs. Global X MSCI | KraneShares Bosera vs. KraneShares MSCI All | KraneShares Bosera vs. Xtrackers Harvest CSI |
| Rayliant Quantamental vs. iShares MSCI China | Rayliant Quantamental vs. Franklin FTSE China | Rayliant Quantamental vs. Simplify Exchange Traded |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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