Correlation Between KraneShares MSCI and Naspers
Can any of the company-specific risk be diversified away by investing in both KraneShares MSCI and Naspers 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 Naspers 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 Naspers Ltd ADR, you can compare the effects of market volatilities on KraneShares MSCI and Naspers 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 Naspers. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares MSCI and Naspers.
Diversification Opportunities for KraneShares MSCI and Naspers
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KraneShares and Naspers is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares MSCI All and Naspers Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naspers Ltd ADR 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 Naspers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naspers Ltd ADR has no effect on the direction of KraneShares MSCI i.e., KraneShares MSCI and Naspers go up and down completely randomly.
Pair Corralation between KraneShares MSCI and Naspers
Given the investment horizon of 90 days KraneShares MSCI All is expected to under-perform the Naspers. But the etf apears to be less risky and, when comparing its historical volatility, KraneShares MSCI All is 1.39 times less risky than Naspers. The etf trades about -0.03 of its potential returns per unit of risk. The Naspers Ltd ADR is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,044 in Naspers Ltd ADR on August 27, 2024 and sell it today you would earn a total of 568.00 from holding Naspers Ltd ADR or generate 18.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.65% |
| Values | Daily Returns |
KraneShares MSCI All vs. Naspers Ltd ADR
Performance |
| Timeline |
| KraneShares MSCI All |
| Naspers Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KraneShares MSCI and Naspers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares MSCI and Naspers
The main advantage of trading using opposite KraneShares MSCI and Naspers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares MSCI position performs unexpectedly, Naspers 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 Naspers will offset losses from the drop in Naspers' 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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