Correlation Between KraneShares and KBND
Can any of the company-specific risk be diversified away by investing in both KraneShares and KBND 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 KBND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares and KBND, you can compare the effects of market volatilities on KraneShares and KBND 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 KBND. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares and KBND.
Diversification Opportunities for KraneShares and KBND
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KraneShares and KBND is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares and KBND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBND 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 KBND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBND has no effect on the direction of KraneShares i.e., KraneShares and KBND go up and down completely randomly.
Pair Corralation between KraneShares and KBND
If you would invest 1,479 in KraneShares on September 4, 2024 and sell it today you would lose (39.00) from holding KraneShares or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 0.5% |
| Values | Daily Returns |
KraneShares vs. KBND
Performance |
| Timeline |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| KBND |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KraneShares and KBND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares and KBND
The main advantage of trading using opposite KraneShares and KBND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares position performs unexpectedly, KBND 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 KBND will offset losses from the drop in KBND's long position.| KraneShares vs. KraneShares SSE STAR | KraneShares vs. KraneShares MSCI China | KraneShares vs. KraneShares MSCI All |
| KBND vs. VanEck China Bond | KBND vs. KraneShares Asia Pacific | KBND vs. KraneShares MSCI All | KBND vs. First Trust Long |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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