Correlation Between KraneShares California and Breakwave Dry
Can any of the company-specific risk be diversified away by investing in both KraneShares California and Breakwave Dry 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 California and Breakwave Dry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares California Carbon and Breakwave Dry Bulk, you can compare the effects of market volatilities on KraneShares California and Breakwave Dry 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 California with a short position of Breakwave Dry. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares California and Breakwave Dry.
Diversification Opportunities for KraneShares California and Breakwave Dry
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KraneShares and Breakwave is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares California Carbon and Breakwave Dry Bulk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Breakwave Dry Bulk and KraneShares California 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 California Carbon are associated (or correlated) with Breakwave Dry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Breakwave Dry Bulk has no effect on the direction of KraneShares California i.e., KraneShares California and Breakwave Dry go up and down completely randomly.
Pair Corralation between KraneShares California and Breakwave Dry
Given the investment horizon of 90 days KraneShares California Carbon is expected to under-perform the Breakwave Dry. But the etf apears to be less risky and, when comparing its historical volatility, KraneShares California Carbon is 2.47 times less risky than Breakwave Dry. The etf trades about -0.1 of its potential returns per unit of risk. The Breakwave Dry Bulk is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Breakwave Dry Bulk on November 27, 2024 and sell it today you would lose (71.00) from holding Breakwave Dry Bulk or give up 10.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares California Carbon vs. Breakwave Dry Bulk
Performance |
| Timeline |
| KraneShares California |
| Breakwave Dry Bulk |
KraneShares California and Breakwave Dry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares California and Breakwave Dry
The main advantage of trading using opposite KraneShares California and Breakwave Dry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares California position performs unexpectedly, Breakwave Dry 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 Breakwave Dry will offset losses from the drop in Breakwave Dry's long position.| KraneShares California vs. KraneShares European Carbon | KraneShares California vs. iPath Series B | KraneShares California vs. KraneShares Global Carbon |
| Breakwave Dry vs. SonicShares Global Shipping | Breakwave Dry vs. KraneShares Global Carbon | Breakwave Dry vs. iPath Series B | Breakwave Dry vs. Danaos |
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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