Correlation Between KraneShares Trust and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both KraneShares Trust and Innovator ETFs 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 Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Trust and Innovator ETFs Trust, you can compare the effects of market volatilities on KraneShares Trust and Innovator ETFs 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 Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Trust and Innovator ETFs.
Diversification Opportunities for KraneShares Trust and Innovator ETFs
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KraneShares and Innovator is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Trust and Innovator ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator ETFs Trust 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 Innovator ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator ETFs Trust has no effect on the direction of KraneShares Trust i.e., KraneShares Trust and Innovator ETFs go up and down completely randomly.
Pair Corralation between KraneShares Trust and Innovator ETFs
Given the investment horizon of 90 days KraneShares Trust is expected to generate 1.3 times less return on investment than Innovator ETFs. But when comparing it to its historical volatility, KraneShares Trust is 1.17 times less risky than Innovator ETFs. It trades about 0.36 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 2,895 in Innovator ETFs Trust on November 18, 2024 and sell it today you would earn a total of 115.00 from holding Innovator ETFs Trust or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares Trust vs. Innovator ETFs Trust
Performance |
| Timeline |
| KraneShares Trust |
| Innovator ETFs Trust |
KraneShares Trust and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Trust and Innovator ETFs
The main advantage of trading using opposite KraneShares Trust and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Trust position performs unexpectedly, Innovator ETFs 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 Innovator ETFs will offset losses from the drop in Innovator ETFs' long position.| KraneShares Trust vs. iShares Dividend and | KraneShares Trust vs. Martin Currie Sustainable | KraneShares Trust vs. VictoryShares THB Mid | KraneShares Trust vs. Mast Global Battery |
| Innovator ETFs vs. Cambria Micro And | Innovator ETFs vs. Invesco Actively Managed | Innovator ETFs vs. Harbor ETF Trust | Innovator ETFs vs. iShares Trust |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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