Correlation Between KraneShares and CHIK
Can any of the company-specific risk be diversified away by investing in both KraneShares and CHIK 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 CHIK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares and CHIK, you can compare the effects of market volatilities on KraneShares and CHIK 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 CHIK. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares and CHIK.
Diversification Opportunities for KraneShares and CHIK
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KraneShares and CHIK is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares and CHIK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIK 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 CHIK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIK has no effect on the direction of KraneShares i.e., KraneShares and CHIK go up and down completely randomly.
Pair Corralation between KraneShares and CHIK
Given the investment horizon of 90 days KraneShares is expected to generate 0.48 times more return on investment than CHIK. However, KraneShares is 2.08 times less risky than CHIK. It trades about -0.01 of its potential returns per unit of risk. CHIK is currently generating about -0.13 per unit of risk. If you would invest 1,580 in KraneShares on August 31, 2024 and sell it today you would lose (140.00) from holding KraneShares or give up 8.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 9.76% |
| Values | Daily Returns |
KraneShares vs. CHIK
Performance |
| Timeline |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| CHIK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KraneShares and CHIK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares and CHIK
The main advantage of trading using opposite KraneShares and CHIK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares position performs unexpectedly, CHIK 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 CHIK will offset losses from the drop in CHIK's long position.| KraneShares vs. KraneShares SSE STAR | KraneShares vs. KraneShares MSCI China | KraneShares vs. KraneShares MSCI All |
| CHIK vs. Xtrackers Harvest CSI | CHIK vs. Aquagold International | CHIK vs. Thrivent High Yield | CHIK vs. Morningstar Unconstrained Allocation |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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