Correlation Between KraneShares and VanEck China
Can any of the company-specific risk be diversified away by investing in both KraneShares 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 KraneShares and VanEck China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares and VanEck China Bond, you can compare the effects of market volatilities on KraneShares 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 KraneShares with a short position of VanEck China. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares and VanEck China.
Diversification Opportunities for KraneShares and VanEck China
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KraneShares and VanEck is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares 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 KraneShares 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 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 KraneShares i.e., KraneShares and VanEck China go up and down completely randomly.
Pair Corralation between KraneShares and VanEck China
If you would invest 2,096 in VanEck China Bond on September 12, 2024 and sell it today you would earn a total of 114.83 from holding VanEck China Bond or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.3% |
| Values | Daily Returns |
KraneShares vs. VanEck China Bond
Performance |
| Timeline |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VanEck China Bond |
KraneShares and VanEck China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares and VanEck China
The main advantage of trading using opposite KraneShares and VanEck China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares 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.| KraneShares vs. First Trust SSI | KraneShares vs. First Trust BuyWrite | KraneShares vs. First Trust Managed | KraneShares vs. First Trust Tactical |
| VanEck China vs. First Trust SSI | VanEck China vs. First Trust BuyWrite | VanEck China vs. First Trust Managed | VanEck China vs. First Trust Tactical |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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