Correlation Between KraneShares MSCI and KraneShares Emerging
Can any of the company-specific risk be diversified away by investing in both KraneShares MSCI and KraneShares Emerging 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 KraneShares Emerging 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 KraneShares Emerging Markets, you can compare the effects of market volatilities on KraneShares MSCI and KraneShares Emerging 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 KraneShares Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares MSCI and KraneShares Emerging.
Diversification Opportunities for KraneShares MSCI and KraneShares Emerging
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KraneShares and KraneShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares MSCI All and KraneShares Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Emerging 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 KraneShares Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Emerging has no effect on the direction of KraneShares MSCI i.e., KraneShares MSCI and KraneShares Emerging go up and down completely randomly.
Pair Corralation between KraneShares MSCI and KraneShares Emerging
Given the investment horizon of 90 days KraneShares MSCI All is expected to generate 1.24 times more return on investment than KraneShares Emerging. However, KraneShares MSCI is 1.24 times more volatile than KraneShares Emerging Markets. It trades about -0.14 of its potential returns per unit of risk. KraneShares Emerging Markets is currently generating about -0.18 per unit of risk. If you would invest 1,587 in KraneShares MSCI All on August 29, 2024 and sell it today you would lose (106.00) from holding KraneShares MSCI All or give up 6.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares MSCI All vs. KraneShares Emerging Markets
Performance |
| Timeline |
| KraneShares MSCI All |
| KraneShares Emerging |
KraneShares MSCI and KraneShares Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares MSCI and KraneShares Emerging
The main advantage of trading using opposite KraneShares MSCI and KraneShares Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares MSCI position performs unexpectedly, KraneShares Emerging 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 KraneShares Emerging will offset losses from the drop in KraneShares Emerging'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 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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