Correlation Between KraneShares CSI and Global X
Can any of the company-specific risk be diversified away by investing in both KraneShares CSI and Global X 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 Global X 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 Global X MSCI, you can compare the effects of market volatilities on KraneShares CSI and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares CSI and Global X.
Diversification Opportunities for KraneShares CSI and Global X
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between KraneShares and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares CSI China and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MSCI has no effect on the direction of KraneShares CSI i.e., KraneShares CSI and Global X go up and down completely randomly.
Pair Corralation between KraneShares CSI and Global X
Given the investment horizon of 90 days KraneShares CSI China is expected to generate 1.09 times more return on investment than Global X. However, KraneShares CSI is 1.09 times more volatile than Global X MSCI. It trades about -0.19 of its potential returns per unit of risk. Global X MSCI is currently generating about -0.22 per unit of risk. If you would invest 3,309 in KraneShares CSI China on August 27, 2024 and sell it today you would lose (324.00) from holding KraneShares CSI China or give up 9.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares CSI China vs. Global X MSCI
Performance |
| Timeline |
| KraneShares CSI China |
| Global X MSCI |
KraneShares CSI and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares CSI and Global X
The main advantage of trading using opposite KraneShares CSI and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares CSI position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| KraneShares CSI vs. iShares MSCI China | KraneShares CSI vs. Invesco China Technology | KraneShares CSI vs. Xtrackers Harvest CSI | KraneShares CSI vs. iShares China Large Cap |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |