Correlation Between KraneShares and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both KraneShares and KraneShares MSCI 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 KraneShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares and KraneShares MSCI All, you can compare the effects of market volatilities on KraneShares and KraneShares MSCI 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 KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares and KraneShares MSCI.
Diversification Opportunities for KraneShares and KraneShares MSCI
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KraneShares and KraneShares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares and KraneShares MSCI All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI All 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 KraneShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares MSCI All has no effect on the direction of KraneShares i.e., KraneShares and KraneShares MSCI go up and down completely randomly.
Pair Corralation between KraneShares and KraneShares MSCI
Given the investment horizon of 90 days KraneShares is expected to generate 0.92 times more return on investment than KraneShares MSCI. However, KraneShares is 1.09 times less risky than KraneShares MSCI. It trades about 0.0 of its potential returns per unit of risk. KraneShares MSCI All is currently generating about -0.04 per unit of risk. If you would invest 1,579 in KraneShares on August 28, 2024 and sell it today you would lose (139.00) from holding KraneShares or give up 8.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.97% |
| Values | Daily Returns |
KraneShares vs. KraneShares MSCI All
Performance |
| Timeline |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| KraneShares MSCI All |
KraneShares and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares and KraneShares MSCI
The main advantage of trading using opposite KraneShares and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares position performs unexpectedly, KraneShares MSCI 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 MSCI will offset losses from the drop in KraneShares MSCI's long position.| KraneShares vs. KraneShares SSE STAR | KraneShares vs. KraneShares MSCI China | KraneShares vs. KraneShares MSCI All |
| KraneShares MSCI vs. KraneShares MSCI China | KraneShares MSCI vs. Global X MSCI | KraneShares MSCI vs. KraneShares Bosera MSCI | KraneShares MSCI vs. KraneShares SSE STAR |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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