Correlation Between KraneShares MSCI and CHIH
Can any of the company-specific risk be diversified away by investing in both KraneShares MSCI and CHIH 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 MSCI and CHIH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares MSCI All and CHIH, you can compare the effects of market volatilities on KraneShares MSCI and CHIH 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 MSCI with a short position of CHIH. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares MSCI and CHIH.
Diversification Opportunities for KraneShares MSCI and CHIH
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KraneShares and CHIH is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares MSCI All and CHIH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIH and KraneShares MSCI 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 MSCI All are associated (or correlated) with CHIH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIH has no effect on the direction of KraneShares MSCI i.e., KraneShares MSCI and CHIH go up and down completely randomly.
Pair Corralation between KraneShares MSCI and CHIH
If you would invest 1,460 in CHIH on September 3, 2024 and sell it today you would earn a total of 0.00 from holding CHIH or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
KraneShares MSCI All vs. CHIH
Performance |
| Timeline |
| KraneShares MSCI All |
| CHIH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KraneShares MSCI and CHIH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares MSCI and CHIH
The main advantage of trading using opposite KraneShares MSCI and CHIH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares MSCI position performs unexpectedly, CHIH 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 CHIH will offset losses from the drop in CHIH's long position.| KraneShares MSCI vs. Franklin FTSE South | KraneShares MSCI vs. Franklin FTSE Japan | KraneShares MSCI vs. Franklin FTSE India | KraneShares MSCI vs. Franklin FTSE Brazil |
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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