Correlation Between KraneShares MSCI and Freedom Day
Can any of the company-specific risk be diversified away by investing in both KraneShares MSCI and Freedom Day 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 MSCI and Freedom Day into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares MSCI One and Freedom Day Dividend, you can compare the effects of market volatilities on KraneShares MSCI and Freedom Day 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 MSCI with a short position of Freedom Day. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares MSCI and Freedom Day.
Diversification Opportunities for KraneShares MSCI and Freedom Day
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between KraneShares and Freedom is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares MSCI One and Freedom Day Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Day Dividend and KraneShares MSCI 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 MSCI One are associated (or correlated) with Freedom Day. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Day Dividend has no effect on the direction of KraneShares MSCI i.e., KraneShares MSCI and Freedom Day go up and down completely randomly.
Pair Corralation between KraneShares MSCI and Freedom Day
Given the investment horizon of 90 days KraneShares MSCI is expected to generate 5.98 times less return on investment than Freedom Day. In addition to that, KraneShares MSCI is 1.28 times more volatile than Freedom Day Dividend. It trades about 0.02 of its total potential returns per unit of risk. Freedom Day Dividend is currently generating about 0.13 per unit of volatility. If you would invest 2,463 in Freedom Day Dividend on September 2, 2024 and sell it today you would earn a total of 1,069 from holding Freedom Day Dividend or generate 43.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
KraneShares MSCI One vs. Freedom Day Dividend
Performance |
| Timeline |
| KraneShares MSCI One |
| Freedom Day Dividend |
KraneShares MSCI and Freedom Day Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares MSCI and Freedom Day
The main advantage of trading using opposite KraneShares MSCI and Freedom Day positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares MSCI position performs unexpectedly, Freedom Day 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 Freedom Day will offset losses from the drop in Freedom Day's long position.| KraneShares MSCI vs. Freedom Day Dividend | KraneShares MSCI vs. iShares MSCI China | KraneShares MSCI vs. iShares Dividend and | KraneShares MSCI vs. SmartETFs Dividend Builder |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |