Correlation Between KraneShares MSCI and WisdomTree China
Can any of the company-specific risk be diversified away by investing in both KraneShares MSCI and WisdomTree China 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 WisdomTree China 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 WisdomTree China ex State Owned, you can compare the effects of market volatilities on KraneShares MSCI and WisdomTree China 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 WisdomTree China. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares MSCI and WisdomTree China.
Diversification Opportunities for KraneShares MSCI and WisdomTree China
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KraneShares and WisdomTree is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares MSCI All and WisdomTree China ex State Owne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree China 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 WisdomTree China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree China has no effect on the direction of KraneShares MSCI i.e., KraneShares MSCI and WisdomTree China go up and down completely randomly.
Pair Corralation between KraneShares MSCI and WisdomTree China
Given the investment horizon of 90 days KraneShares MSCI All is expected to under-perform the WisdomTree China. But the etf apears to be less risky and, when comparing its historical volatility, KraneShares MSCI All is 1.01 times less risky than WisdomTree China. The etf trades about -0.02 of its potential returns per unit of risk. The WisdomTree China ex State Owned is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,040 in WisdomTree China ex State Owned on August 31, 2024 and sell it today you would earn a total of 35.00 from holding WisdomTree China ex State Owned or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
KraneShares MSCI All vs. WisdomTree China ex State Owne
Performance |
| Timeline |
| KraneShares MSCI All |
| WisdomTree China |
KraneShares MSCI and WisdomTree China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares MSCI and WisdomTree China
The main advantage of trading using opposite KraneShares MSCI and WisdomTree China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares MSCI position performs unexpectedly, WisdomTree China 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 WisdomTree China will offset losses from the drop in WisdomTree China'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 |
| WisdomTree China vs. Xtrackers Harvest CSI | WisdomTree China vs. Aquagold International | WisdomTree China vs. Thrivent High Yield | WisdomTree China 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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