Correlation Between SPDR SP and KraneShares Bosera
Can any of the company-specific risk be diversified away by investing in both SPDR SP and KraneShares Bosera 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 SP and KraneShares Bosera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and KraneShares Bosera MSCI, you can compare the effects of market volatilities on SPDR SP and KraneShares Bosera 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 SP with a short position of KraneShares Bosera. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and KraneShares Bosera.
Diversification Opportunities for SPDR SP and KraneShares Bosera
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and KraneShares is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and KraneShares Bosera MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Bosera MSCI and SPDR SP 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 SP 500 are associated (or correlated) with KraneShares Bosera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Bosera MSCI has no effect on the direction of SPDR SP i.e., SPDR SP and KraneShares Bosera go up and down completely randomly.
Pair Corralation between SPDR SP and KraneShares Bosera
Considering the 90-day investment horizon SPDR SP is expected to generate 1.01 times less return on investment than KraneShares Bosera. But when comparing it to its historical volatility, SPDR SP 500 is 2.66 times less risky than KraneShares Bosera. It trades about 0.12 of its potential returns per unit of risk. KraneShares Bosera MSCI is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,226 in KraneShares Bosera MSCI on August 24, 2024 and sell it today you would earn a total of 222.00 from holding KraneShares Bosera MSCI or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. KraneShares Bosera MSCI
Performance |
| Timeline |
| SPDR SP 500 |
| KraneShares Bosera MSCI |
SPDR SP and KraneShares Bosera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and KraneShares Bosera
The main advantage of trading using opposite SPDR SP and KraneShares Bosera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, KraneShares Bosera 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 Bosera will offset losses from the drop in KraneShares Bosera's long position.| SPDR SP vs. SPDR Gold Shares | SPDR SP vs. Vanguard Real Estate | SPDR SP vs. Vanguard Total Stock | SPDR SP vs. Vanguard FTSE Emerging |
| KraneShares Bosera vs. Global X MSCI | KraneShares Bosera vs. KraneShares MSCI All | KraneShares Bosera vs. Xtrackers Harvest CSI |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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