Correlation Between SCOR PK and KraneShares Emerging
Can any of the company-specific risk be diversified away by investing in both SCOR PK and KraneShares Emerging 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 SCOR PK and KraneShares Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and KraneShares Emerging Markets, you can compare the effects of market volatilities on SCOR PK and KraneShares Emerging 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 SCOR PK with a short position of KraneShares Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and KraneShares Emerging.
Diversification Opportunities for SCOR PK and KraneShares Emerging
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCOR and KraneShares is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and KraneShares Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Emerging and SCOR PK 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 SCOR PK are associated (or correlated) with KraneShares Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Emerging has no effect on the direction of SCOR PK i.e., SCOR PK and KraneShares Emerging go up and down completely randomly.
Pair Corralation between SCOR PK and KraneShares Emerging
Assuming the 90 days horizon SCOR PK is expected to generate 1.3 times more return on investment than KraneShares Emerging. However, SCOR PK is 1.3 times more volatile than KraneShares Emerging Markets. It trades about 0.13 of its potential returns per unit of risk. KraneShares Emerging Markets is currently generating about 0.11 per unit of risk. If you would invest 192.00 in SCOR PK on September 4, 2024 and sell it today you would earn a total of 56.00 from holding SCOR PK or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.82% |
| Values | Daily Returns |
SCOR PK vs. KraneShares Emerging Markets
Performance |
| Timeline |
| SCOR PK |
| KraneShares Emerging |
SCOR PK and KraneShares Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and KraneShares Emerging
The main advantage of trading using opposite SCOR PK and KraneShares Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, KraneShares Emerging 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 Emerging will offset losses from the drop in KraneShares Emerging's long position.The idea behind SCOR PK and KraneShares Emerging Markets 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.| KraneShares Emerging vs. KraneShares Bosera MSCI | KraneShares Emerging vs. KraneShares MSCI One | KraneShares Emerging vs. Cambria Value and | KraneShares Emerging 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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