Correlation Between KraneShares MSCI and KraneShares ICBCCS
Can any of the company-specific risk be diversified away by investing in both KraneShares MSCI and KraneShares ICBCCS 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 MSCI and KraneShares ICBCCS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares MSCI China and KraneShares ICBCCS SP, you can compare the effects of market volatilities on KraneShares MSCI and KraneShares ICBCCS 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 MSCI with a short position of KraneShares ICBCCS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares MSCI and KraneShares ICBCCS.
Diversification Opportunities for KraneShares MSCI and KraneShares ICBCCS
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between KraneShares and KraneShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares MSCI China and KraneShares ICBCCS SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares ICBCCS and KraneShares MSCI 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 MSCI China are associated (or correlated) with KraneShares ICBCCS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares ICBCCS has no effect on the direction of KraneShares MSCI i.e., KraneShares MSCI and KraneShares ICBCCS go up and down completely randomly.
Pair Corralation between KraneShares MSCI and KraneShares ICBCCS
Assuming the 90 days trading horizon KraneShares MSCI China is expected to generate 1.38 times more return on investment than KraneShares ICBCCS. However, KraneShares MSCI is 1.38 times more volatile than KraneShares ICBCCS SP. It trades about 0.01 of its potential returns per unit of risk. KraneShares ICBCCS SP is currently generating about 0.0 per unit of risk. If you would invest 1,773 in KraneShares MSCI China on August 27, 2024 and sell it today you would earn a total of 6.00 from holding KraneShares MSCI China or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 48.59% |
| Values | Daily Returns |
KraneShares MSCI China vs. KraneShares ICBCCS SP
Performance |
| Timeline |
| KraneShares MSCI China |
| KraneShares ICBCCS |
KraneShares MSCI and KraneShares ICBCCS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares MSCI and KraneShares ICBCCS
The main advantage of trading using opposite KraneShares MSCI and KraneShares ICBCCS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares MSCI position performs unexpectedly, KraneShares ICBCCS 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 ICBCCS will offset losses from the drop in KraneShares ICBCCS's long position.| KraneShares MSCI vs. Scottish Mortgage Investment | KraneShares MSCI vs. CT Private Equity | KraneShares MSCI vs. Aberdeen New India | KraneShares MSCI vs. Invesco Health Care |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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