Correlation Between Vanguard Small and KraneShares
Can any of the company-specific risk be diversified away by investing in both Vanguard Small 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 Vanguard Small and KraneShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Index and KraneShares, you can compare the effects of market volatilities on Vanguard Small 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 Vanguard Small with a short position of KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and KraneShares.
Diversification Opportunities for Vanguard Small and KraneShares
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and KraneShares is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares and Vanguard Small 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 Vanguard Small Cap Index 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 Vanguard Small i.e., Vanguard Small and KraneShares go up and down completely randomly.
Pair Corralation between Vanguard Small and KraneShares
If you would invest 23,687 in Vanguard Small Cap Index on September 4, 2024 and sell it today you would earn a total of 2,247 from holding Vanguard Small Cap Index or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Vanguard Small Cap Index vs. KraneShares
Performance |
| Timeline |
| Vanguard Small Cap |
| KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Vanguard Small and KraneShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and KraneShares
The main advantage of trading using opposite Vanguard Small and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small 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.| Vanguard Small vs. Invesco DWA Emerging | Vanguard Small vs. SCOR PK | Vanguard Small vs. HUMANA INC | Vanguard Small vs. Aquagold International |
| KraneShares vs. KraneShares European Carbon | KraneShares vs. KraneShares California Carbon | KraneShares vs. Franklin Genomic Advancements |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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