Correlation Between KraneShares SSE and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both KraneShares SSE and IShares MSCI 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 SSE and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares SSE STAR and iShares MSCI Singapore, you can compare the effects of market volatilities on KraneShares SSE and IShares MSCI 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 SSE with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares SSE and IShares MSCI.
Diversification Opportunities for KraneShares SSE and IShares MSCI
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KraneShares and IShares is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares SSE STAR and iShares MSCI Singapore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Singapore and KraneShares SSE 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 SSE STAR are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Singapore has no effect on the direction of KraneShares SSE i.e., KraneShares SSE and IShares MSCI go up and down completely randomly.
Pair Corralation between KraneShares SSE and IShares MSCI
Given the investment horizon of 90 days KraneShares SSE STAR is expected to generate 3.87 times more return on investment than IShares MSCI. However, KraneShares SSE is 3.87 times more volatile than iShares MSCI Singapore. It trades about 0.07 of its potential returns per unit of risk. iShares MSCI Singapore is currently generating about 0.25 per unit of risk. If you would invest 1,310 in KraneShares SSE STAR on August 31, 2024 and sell it today you would earn a total of 59.00 from holding KraneShares SSE STAR or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
KraneShares SSE STAR vs. iShares MSCI Singapore
Performance |
| Timeline |
| KraneShares SSE STAR |
| iShares MSCI Singapore |
KraneShares SSE and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares SSE and IShares MSCI
The main advantage of trading using opposite KraneShares SSE and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares SSE position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI's long position.| KraneShares SSE vs. Xtrackers Harvest CSI | KraneShares SSE vs. Aquagold International | KraneShares SSE vs. Thrivent High Yield | KraneShares SSE vs. Morningstar Unconstrained Allocation |
| IShares MSCI vs. iShares MSCI Malaysia | IShares MSCI vs. iShares MSCI Hong | IShares MSCI vs. iShares MSCI Australia | IShares MSCI vs. iShares MSCI Taiwan |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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