Correlation Between KraneShares CSI and KraneShares

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Can any of the company-specific risk be diversified away by investing in both KraneShares CSI and KraneShares 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 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, you can compare the effects of market volatilities on KraneShares CSI and KraneShares 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares CSI and KraneShares.

Diversification Opportunities for KraneShares CSI and KraneShares

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between KraneShares and KraneShares is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares CSI China and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares has no effect on the direction of KraneShares CSI i.e., KraneShares CSI and KraneShares go up and down completely randomly.

Pair Corralation between KraneShares CSI and KraneShares

If you would invest  3,065  in KraneShares CSI China on September 13, 2024 and sell it today you would earn a total of  148.00  from holding KraneShares CSI China or generate 4.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

KraneShares CSI China  vs.  KraneShares

 Performance 
       Timeline  
KraneShares CSI China 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in KraneShares CSI China are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, KraneShares CSI sustained solid returns over the last few months and may actually be approaching a breakup point.
KraneShares 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KraneShares has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, KraneShares is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

KraneShares CSI and KraneShares Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KraneShares CSI and KraneShares

The main advantage of trading using opposite KraneShares CSI and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares CSI position performs unexpectedly, KraneShares 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 will offset losses from the drop in KraneShares' long position.
The idea behind KraneShares CSI China and KraneShares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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