Correlation Between KBND and VanEck China
Can any of the company-specific risk be diversified away by investing in both KBND and VanEck China 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 KBND and VanEck China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBND and VanEck China Bond, you can compare the effects of market volatilities on KBND and VanEck China 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 KBND with a short position of VanEck China. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBND and VanEck China.
Diversification Opportunities for KBND and VanEck China
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KBND and VanEck is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding KBND and VanEck China Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck China Bond and KBND 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 KBND are associated (or correlated) with VanEck China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck China Bond has no effect on the direction of KBND i.e., KBND and VanEck China go up and down completely randomly.
Pair Corralation between KBND and VanEck China
If you would invest 2,175 in VanEck China Bond on August 30, 2024 and sell it today you would earn a total of 36.00 from holding VanEck China Bond or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
KBND vs. VanEck China Bond
Performance |
| Timeline |
| KBND |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VanEck China Bond |
KBND and VanEck China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBND and VanEck China
The main advantage of trading using opposite KBND and VanEck China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBND position performs unexpectedly, VanEck China 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 VanEck China will offset losses from the drop in VanEck China's long position.| KBND vs. VanEck China Bond | KBND vs. KraneShares Asia Pacific | KBND vs. KraneShares MSCI All | KBND vs. First Trust Long |
| VanEck China vs. SPDR Bloomberg Emerging | VanEck China vs. Vanguard Emerging Markets | VanEck China vs. SPDR Bloomberg Barclays | VanEck China vs. VanEck JP Morgan |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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