Correlation Between KraneShares Emerging and SCOR PK
Can any of the company-specific risk be diversified away by investing in both KraneShares Emerging and SCOR PK 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 Emerging and SCOR PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Emerging Markets and SCOR PK, you can compare the effects of market volatilities on KraneShares Emerging and SCOR PK 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 Emerging with a short position of SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Emerging and SCOR PK.
Diversification Opportunities for KraneShares Emerging and SCOR PK
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KraneShares and SCOR is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Emerging Markets and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK and KraneShares Emerging 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 Emerging Markets are associated (or correlated) with SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of KraneShares Emerging i.e., KraneShares Emerging and SCOR PK go up and down completely randomly.
Pair Corralation between KraneShares Emerging and SCOR PK
Given the investment horizon of 90 days KraneShares Emerging Markets is expected to generate 0.56 times more return on investment than SCOR PK. However, KraneShares Emerging Markets is 1.79 times less risky than SCOR PK. It trades about 0.06 of its potential returns per unit of risk. SCOR PK is currently generating about 0.0 per unit of risk. If you would invest 1,430 in KraneShares Emerging Markets on September 3, 2024 and sell it today you would earn a total of 322.00 from holding KraneShares Emerging Markets or generate 22.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
KraneShares Emerging Markets vs. SCOR PK
Performance |
| Timeline |
| KraneShares Emerging |
| SCOR PK |
KraneShares Emerging and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Emerging and SCOR PK
The main advantage of trading using opposite KraneShares Emerging and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Emerging position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK's long position.| KraneShares Emerging vs. SCOR PK | KraneShares Emerging vs. HUMANA INC | KraneShares Emerging vs. Aquagold International | KraneShares Emerging vs. Barloworld Ltd ADR |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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