Correlation Between KraneShares Trust and IShares Dividend
Can any of the company-specific risk be diversified away by investing in both KraneShares Trust and IShares Dividend 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 IShares Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Trust and iShares Dividend and, you can compare the effects of market volatilities on KraneShares Trust and IShares Dividend 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 IShares Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Trust and IShares Dividend.
Diversification Opportunities for KraneShares Trust and IShares Dividend
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KraneShares and IShares is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Trust and iShares Dividend and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Dividend 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 IShares Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Dividend has no effect on the direction of KraneShares Trust i.e., KraneShares Trust and IShares Dividend go up and down completely randomly.
Pair Corralation between KraneShares Trust and IShares Dividend
Given the investment horizon of 90 days KraneShares Trust is expected to under-perform the IShares Dividend. But the etf apears to be less risky and, when comparing its historical volatility, KraneShares Trust is 1.74 times less risky than IShares Dividend. The etf trades about -0.02 of its potential returns per unit of risk. The iShares Dividend and is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,858 in iShares Dividend and on August 30, 2024 and sell it today you would earn a total of 227.00 from holding iShares Dividend and or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
KraneShares Trust vs. iShares Dividend and
Performance |
| Timeline |
| KraneShares Trust |
| iShares Dividend |
KraneShares Trust and IShares Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Trust and IShares Dividend
The main advantage of trading using opposite KraneShares Trust and IShares Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Trust position performs unexpectedly, IShares Dividend 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 IShares Dividend will offset losses from the drop in IShares Dividend's long position.| KraneShares Trust vs. Freedom Day Dividend | KraneShares Trust vs. Franklin Templeton ETF | KraneShares Trust vs. iShares MSCI China | KraneShares Trust vs. Tidal Trust II |
| IShares Dividend vs. iShares ESG Aware | IShares Dividend vs. Pacer Cash Cows | IShares Dividend vs. iShares MSCI USA | IShares Dividend vs. Invesco KBW Premium |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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