Correlation Between KraneShares Trust and Simplify Volatility
Can any of the company-specific risk be diversified away by investing in both KraneShares Trust and Simplify Volatility 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 Trust and Simplify Volatility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Trust and Simplify Volatility Premium, you can compare the effects of market volatilities on KraneShares Trust and Simplify Volatility 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 Trust with a short position of Simplify Volatility. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Trust and Simplify Volatility.
Diversification Opportunities for KraneShares Trust and Simplify Volatility
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KraneShares and Simplify is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Trust and Simplify Volatility Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Volatility and KraneShares Trust 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 Trust are associated (or correlated) with Simplify Volatility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Volatility has no effect on the direction of KraneShares Trust i.e., KraneShares Trust and Simplify Volatility go up and down completely randomly.
Pair Corralation between KraneShares Trust and Simplify Volatility
Given the investment horizon of 90 days KraneShares Trust is expected to under-perform the Simplify Volatility. In addition to that, KraneShares Trust is 2.11 times more volatile than Simplify Volatility Premium. It trades about -0.12 of its total potential returns per unit of risk. Simplify Volatility Premium is currently generating about 0.04 per unit of volatility. If you would invest 2,140 in Simplify Volatility Premium on August 30, 2024 and sell it today you would earn a total of 26.00 from holding Simplify Volatility Premium or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares Trust vs. Simplify Volatility Premium
Performance |
| Timeline |
| KraneShares Trust |
| Simplify Volatility |
KraneShares Trust and Simplify Volatility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Trust and Simplify Volatility
The main advantage of trading using opposite KraneShares Trust and Simplify Volatility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Trust position performs unexpectedly, Simplify Volatility 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 Simplify Volatility will offset losses from the drop in Simplify Volatility's long position.| KraneShares Trust vs. ABIVAX Socit Anonyme | KraneShares Trust vs. HUMANA INC | KraneShares Trust vs. SCOR PK | KraneShares Trust vs. Aquagold International |
| Simplify Volatility vs. Tidal Trust II | Simplify Volatility vs. ETRACS Monthly Pay | Simplify Volatility vs. JPMorgan Nasdaq Equity | Simplify Volatility vs. Tidal Trust II |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |