Correlation Between SPDR Barclays and KraneShares CSI
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and KraneShares CSI 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 SPDR Barclays and KraneShares CSI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays 10 and KraneShares CSI China, you can compare the effects of market volatilities on SPDR Barclays and KraneShares CSI 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 SPDR Barclays with a short position of KraneShares CSI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and KraneShares CSI.
Diversification Opportunities for SPDR Barclays and KraneShares CSI
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and KraneShares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays 10 and KraneShares CSI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares CSI China and SPDR Barclays 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 SPDR Barclays 10 are associated (or correlated) with KraneShares CSI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares CSI China has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and KraneShares CSI go up and down completely randomly.
Pair Corralation between SPDR Barclays and KraneShares CSI
Assuming the 90 days trading horizon SPDR Barclays is expected to generate 51.16 times less return on investment than KraneShares CSI. But when comparing it to its historical volatility, SPDR Barclays 10 is 2.59 times less risky than KraneShares CSI. It trades about 0.0 of its potential returns per unit of risk. KraneShares CSI China is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,136 in KraneShares CSI China on August 27, 2024 and sell it today you would earn a total of 247.00 from holding KraneShares CSI China or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays 10 vs. KraneShares CSI China
Performance |
| Timeline |
| SPDR Barclays 10 |
| KraneShares CSI China |
SPDR Barclays and KraneShares CSI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and KraneShares CSI
The main advantage of trading using opposite SPDR Barclays and KraneShares CSI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, KraneShares CSI 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 CSI will offset losses from the drop in KraneShares CSI's long position.| SPDR Barclays vs. Leverage Shares 3x | SPDR Barclays vs. WisdomTree SP 500 | SPDR Barclays vs. WisdomTree Silver 3x | SPDR Barclays vs. Leverage Shares 3x |
| KraneShares CSI vs. Leverage Shares 3x | KraneShares CSI vs. WisdomTree SP 500 | KraneShares CSI vs. WisdomTree Silver 3x | KraneShares CSI 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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