Correlation Between KBND and KraneShares
Can any of the company-specific risk be diversified away by investing in both KBND and KraneShares 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 KraneShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBND and KraneShares, you can compare the effects of market volatilities on KBND and KraneShares 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 KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBND and KraneShares.
Diversification Opportunities for KBND and KraneShares
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KBND and KraneShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding KBND and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares 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 KraneShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares has no effect on the direction of KBND i.e., KBND and KraneShares go up and down completely randomly.
Pair Corralation between KBND and KraneShares
If you would invest 1,479 in KraneShares on September 4, 2024 and sell it today you would lose (39.00) from holding KraneShares or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 0.5% |
| Values | Daily Returns |
KBND vs. KraneShares
Performance |
| Timeline |
| KBND |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
KBND and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBND and KraneShares
The main advantage of trading using opposite KBND and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBND position performs unexpectedly, KraneShares 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 will offset losses from the drop in KraneShares' long position.| KBND vs. VanEck China Bond | KBND vs. KraneShares Asia Pacific | KBND vs. KraneShares MSCI All | KBND vs. First Trust Long |
| KraneShares vs. KraneShares SSE STAR | KraneShares vs. KraneShares MSCI China | KraneShares 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |