Correlation Between KraneShares CSI and KraneShares Electric
Can any of the company-specific risk be diversified away by investing in both KraneShares CSI and KraneShares Electric 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 CSI and KraneShares Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares CSI China and KraneShares Electric Vehicles, you can compare the effects of market volatilities on KraneShares CSI and KraneShares Electric 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 CSI with a short position of KraneShares Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares CSI and KraneShares Electric.
Diversification Opportunities for KraneShares CSI and KraneShares Electric
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KraneShares and KraneShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares CSI China and KraneShares Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Electric and KraneShares CSI 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 CSI China are associated (or correlated) with KraneShares Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Electric has no effect on the direction of KraneShares CSI i.e., KraneShares CSI and KraneShares Electric go up and down completely randomly.
Pair Corralation between KraneShares CSI and KraneShares Electric
Assuming the 90 days trading horizon KraneShares CSI China is expected to generate 1.5 times more return on investment than KraneShares Electric. However, KraneShares CSI is 1.5 times more volatile than KraneShares Electric Vehicles. It trades about 0.01 of its potential returns per unit of risk. KraneShares Electric Vehicles is currently generating about -0.04 per unit of risk. If you would invest 2,061 in KraneShares CSI China on August 27, 2024 and sell it today you would lose (19.00) from holding KraneShares CSI China or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
KraneShares CSI China vs. KraneShares Electric Vehicles
Performance |
| Timeline |
| KraneShares CSI China |
| KraneShares Electric |
KraneShares CSI and KraneShares Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares CSI and KraneShares Electric
The main advantage of trading using opposite KraneShares CSI and KraneShares Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares CSI position performs unexpectedly, KraneShares Electric 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 Electric will offset losses from the drop in KraneShares Electric's long position.| KraneShares CSI vs. Leverage Shares 3x | KraneShares CSI vs. WisdomTree SP 500 | KraneShares CSI vs. WisdomTree Silver 3x | KraneShares CSI vs. Leverage Shares 3x |
| KraneShares Electric vs. Leverage Shares 3x | KraneShares Electric vs. WisdomTree SP 500 | KraneShares Electric vs. WisdomTree Silver 3x | KraneShares Electric vs. Leverage Shares 3x |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |