Correlation Between KraneShares Global and KraneShares California
Can any of the company-specific risk be diversified away by investing in both KraneShares Global and KraneShares California 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 Global and KraneShares California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Global Carbon and KraneShares California Carbon, you can compare the effects of market volatilities on KraneShares Global and KraneShares California 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 Global with a short position of KraneShares California. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Global and KraneShares California.
Diversification Opportunities for KraneShares Global and KraneShares California
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between KraneShares and KraneShares is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Global Carbon and KraneShares California Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares California and KraneShares Global 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 Global Carbon are associated (or correlated) with KraneShares California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares California has no effect on the direction of KraneShares Global i.e., KraneShares Global and KraneShares California go up and down completely randomly.
Pair Corralation between KraneShares Global and KraneShares California
Given the investment horizon of 90 days KraneShares Global Carbon is expected to generate 0.75 times more return on investment than KraneShares California. However, KraneShares Global Carbon is 1.33 times less risky than KraneShares California. It trades about -0.04 of its potential returns per unit of risk. KraneShares California Carbon is currently generating about -0.24 per unit of risk. If you would invest 3,163 in KraneShares Global Carbon on September 1, 2024 and sell it today you would lose (41.00) from holding KraneShares Global Carbon or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
KraneShares Global Carbon vs. KraneShares California Carbon
Performance |
| Timeline |
| KraneShares Global Carbon |
| KraneShares California |
KraneShares Global and KraneShares California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Global and KraneShares California
The main advantage of trading using opposite KraneShares Global and KraneShares California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Global position performs unexpectedly, KraneShares California 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 California will offset losses from the drop in KraneShares California's long position.| KraneShares Global vs. Goldman Sachs Physical | KraneShares Global vs. iShares Gold Trust | KraneShares Global vs. iShares Bloomberg Roll |
| KraneShares California vs. Goldman Sachs Physical | KraneShares California vs. iShares Gold Trust | KraneShares California vs. iShares Bloomberg Roll |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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