Correlation Between KraneShares California and KraneShares
Can any of the company-specific risk be diversified away by investing in both KraneShares California 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 KraneShares California and KraneShares 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 KraneShares, you can compare the effects of market volatilities on KraneShares California 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 KraneShares California with a short position of KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares California and KraneShares.
Diversification Opportunities for KraneShares California and KraneShares
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between KraneShares and KraneShares is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares California Carbon and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares 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 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 KraneShares California i.e., KraneShares California and KraneShares go up and down completely randomly.
Pair Corralation between KraneShares California and KraneShares
If you would invest 2,810 in KraneShares on August 30, 2024 and sell it today you would earn a total of 0.00 from holding KraneShares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
KraneShares California Carbon vs. KraneShares
Performance |
| Timeline |
| KraneShares California |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
KraneShares California and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares California and KraneShares
The main advantage of trading using opposite KraneShares California and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares California 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.| KraneShares California vs. KraneShares European Carbon | KraneShares California vs. iPath Series B | KraneShares California vs. KraneShares Global Carbon |
| KraneShares vs. KraneShares Asia Pacific | KraneShares vs. KraneShares European Carbon | KraneShares vs. KraneShares California Carbon |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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