Correlation Between Microsoft and KraneShares
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and KraneShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and KraneShares, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and KraneShares.
Diversification Opportunities for Microsoft and KraneShares
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and KraneShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares and Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and KraneShares go up and down completely randomly.
Pair Corralation between Microsoft and KraneShares
If you would invest (100.00) in KraneShares on November 22, 2024 and sell it today you would earn a total of 100.00 from holding KraneShares or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Microsoft vs. KraneShares
Performance |
| Timeline |
| Microsoft |
| KraneShares |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Microsoft and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and KraneShares
The main advantage of trading using opposite Microsoft and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| KraneShares vs. KraneShares Emerging Markets | KraneShares vs. KraneShares MSCI All | KraneShares vs. KraneShares MSCI All |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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