Correlation Between KraneShares CSI and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both KraneShares CSI and Franklin FTSE 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 Franklin FTSE 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 Franklin FTSE Hong, you can compare the effects of market volatilities on KraneShares CSI and Franklin FTSE 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 Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares CSI and Franklin FTSE.
Diversification Opportunities for KraneShares CSI and Franklin FTSE
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KraneShares and Franklin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares CSI China and Franklin FTSE Hong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Hong 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 Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Hong has no effect on the direction of KraneShares CSI i.e., KraneShares CSI and Franklin FTSE go up and down completely randomly.
Pair Corralation between KraneShares CSI and Franklin FTSE
Given the investment horizon of 90 days KraneShares CSI China is expected to under-perform the Franklin FTSE. In addition to that, KraneShares CSI is 2.14 times more volatile than Franklin FTSE Hong. It trades about -0.1 of its total potential returns per unit of risk. Franklin FTSE Hong is currently generating about -0.21 per unit of volatility. If you would invest 1,854 in Franklin FTSE Hong on August 25, 2024 and sell it today you would lose (100.00) from holding Franklin FTSE Hong or give up 5.39% 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. Franklin FTSE Hong
Performance |
| Timeline |
| KraneShares CSI China |
| Franklin FTSE Hong |
KraneShares CSI and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares CSI and Franklin FTSE
The main advantage of trading using opposite KraneShares CSI and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares CSI position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| KraneShares CSI vs. iShares MSCI China | KraneShares CSI vs. Invesco China Technology | KraneShares CSI vs. Xtrackers Harvest CSI | KraneShares CSI vs. PDD Holdings |
| Franklin FTSE vs. Franklin FTSE China | Franklin FTSE vs. Franklin FTSE Taiwan | Franklin FTSE vs. Franklin FTSE Japan | Franklin FTSE vs. Franklin FTSE Germany |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |