Correlation Between KraneShares Global and KSET
Can any of the company-specific risk be diversified away by investing in both KraneShares Global and KSET 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 KSET 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 KSET, you can compare the effects of market volatilities on KraneShares Global and KSET 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 KSET. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Global and KSET.
Diversification Opportunities for KraneShares Global and KSET
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KraneShares and KSET is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Global Carbon and KSET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSET 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 KSET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSET has no effect on the direction of KraneShares Global i.e., KraneShares Global and KSET go up and down completely randomly.
Pair Corralation between KraneShares Global and KSET
Given the investment horizon of 90 days KraneShares Global Carbon is expected to under-perform the KSET. But the etf apears to be less risky and, when comparing its historical volatility, KraneShares Global Carbon is 4.76 times less risky than KSET. The etf trades about -0.02 of its potential returns per unit of risk. The KSET is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 243.00 in KSET on September 2, 2024 and sell it today you would earn a total of 55.00 from holding KSET or generate 22.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 8.06% |
| Values | Daily Returns |
KraneShares Global Carbon vs. KSET
Performance |
| Timeline |
| KraneShares Global Carbon |
| KSET |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KraneShares Global and KSET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Global and KSET
The main advantage of trading using opposite KraneShares Global and KSET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Global position performs unexpectedly, KSET 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 KSET will offset losses from the drop in KSET's long position.| KraneShares Global vs. United States Brent | KraneShares Global vs. ProShares K 1 Free | KraneShares Global vs. Invesco DB Energy | KraneShares Global vs. Invesco DB Oil |
| KSET vs. KraneShares European Carbon | KSET vs. KraneShares California Carbon | KSET vs. KraneShares Global Carbon | KSET vs. iPath Series B |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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