Correlation Between Snap and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both Snap and KraneShares MSCI 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 Snap and KraneShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and KraneShares MSCI Emerging, you can compare the effects of market volatilities on Snap and KraneShares MSCI 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 Snap with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and KraneShares MSCI.
Diversification Opportunities for Snap and KraneShares MSCI
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Snap and KraneShares is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and KraneShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI Emerging and Snap 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 Snap Inc are associated (or correlated) with KraneShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares MSCI Emerging has no effect on the direction of Snap i.e., Snap and KraneShares MSCI go up and down completely randomly.
Pair Corralation between Snap and KraneShares MSCI
Given the investment horizon of 90 days Snap Inc is expected to under-perform the KraneShares MSCI. In addition to that, Snap is 3.77 times more volatile than KraneShares MSCI Emerging. It trades about -0.03 of its total potential returns per unit of risk. KraneShares MSCI Emerging is currently generating about -0.11 per unit of volatility. If you would invest 3,015 in KraneShares MSCI Emerging on September 1, 2024 and sell it today you would lose (59.00) from holding KraneShares MSCI Emerging or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Snap Inc vs. KraneShares MSCI Emerging
Performance |
| Timeline |
| Snap Inc |
| KraneShares MSCI Emerging |
Snap and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and KraneShares MSCI
The main advantage of trading using opposite Snap and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, KraneShares MSCI 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 MSCI will offset losses from the drop in KraneShares MSCI's long position.The idea behind Snap Inc and KraneShares MSCI Emerging 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 MSCI vs. Xtrackers MSCI Emerging | KraneShares MSCI vs. FlexShares Morningstar Emerging | KraneShares MSCI vs. First Trust Emerging |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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