Correlation Between KraneShares MSCI and CHIK
Can any of the company-specific risk be diversified away by investing in both KraneShares MSCI and CHIK 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 CHIK 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 CHIK, you can compare the effects of market volatilities on KraneShares MSCI and CHIK 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 CHIK. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares MSCI and CHIK.
Diversification Opportunities for KraneShares MSCI and CHIK
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KraneShares and CHIK is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares MSCI All and CHIK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIK 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 CHIK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIK has no effect on the direction of KraneShares MSCI i.e., KraneShares MSCI and CHIK go up and down completely randomly.
Pair Corralation between KraneShares MSCI and CHIK
Given the investment horizon of 90 days KraneShares MSCI All is expected to generate 0.54 times more return on investment than CHIK. However, KraneShares MSCI All is 1.86 times less risky than CHIK. It trades about -0.02 of its potential returns per unit of risk. CHIK is currently generating about -0.13 per unit of risk. If you would invest 1,866 in KraneShares MSCI All on August 31, 2024 and sell it today you would lose (336.95) from holding KraneShares MSCI All or give up 18.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
KraneShares MSCI All vs. CHIK
Performance |
| Timeline |
| KraneShares MSCI All |
| CHIK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KraneShares MSCI and CHIK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares MSCI and CHIK
The main advantage of trading using opposite KraneShares MSCI and CHIK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares MSCI position performs unexpectedly, CHIK 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 CHIK will offset losses from the drop in CHIK's long position.| KraneShares MSCI vs. KraneShares MSCI China | KraneShares MSCI vs. Global X MSCI | KraneShares MSCI vs. KraneShares Bosera MSCI | KraneShares MSCI vs. KraneShares SSE STAR |
| CHIK vs. Xtrackers Harvest CSI | CHIK vs. Aquagold International | CHIK vs. Thrivent High Yield | CHIK vs. Morningstar Unconstrained Allocation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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