Correlation Between KraneShares Asia and KBND
Can any of the company-specific risk be diversified away by investing in both KraneShares Asia 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 Asia and KBND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Asia Pacific and KBND, you can compare the effects of market volatilities on KraneShares Asia 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 Asia with a short position of KBND. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Asia and KBND.
Diversification Opportunities for KraneShares Asia and KBND
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KraneShares and KBND is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Asia Pacific and KBND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBND and KraneShares Asia 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 Asia Pacific 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 Asia i.e., KraneShares Asia and KBND go up and down completely randomly.
Pair Corralation between KraneShares Asia and KBND
If you would invest 2,200 in KraneShares Asia Pacific on November 9, 2024 and sell it today you would earn a total of 197.00 from holding KraneShares Asia Pacific or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
KraneShares Asia Pacific vs. KBND
Performance |
| Timeline |
| KraneShares Asia Pacific |
| KBND |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
KraneShares Asia and KBND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Asia and KBND
The main advantage of trading using opposite KraneShares Asia and KBND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Asia 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.The idea behind KraneShares Asia Pacific and KBND pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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