Correlation Between Vanguard Small and KraneShares Artificial
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and KraneShares Artificial 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 Artificial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Growth and KraneShares Artificial Intelligence, you can compare the effects of market volatilities on Vanguard Small and KraneShares Artificial 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 Artificial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and KraneShares Artificial.
Diversification Opportunities for Vanguard Small and KraneShares Artificial
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and KraneShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Growth and KraneShares Artificial Intelli in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Artificial 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 Growth are associated (or correlated) with KraneShares Artificial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Artificial has no effect on the direction of Vanguard Small i.e., Vanguard Small and KraneShares Artificial go up and down completely randomly.
Pair Corralation between Vanguard Small and KraneShares Artificial
Considering the 90-day investment horizon Vanguard Small is expected to generate 1.29 times less return on investment than KraneShares Artificial. But when comparing it to its historical volatility, Vanguard Small Cap Growth is 1.42 times less risky than KraneShares Artificial. It trades about 0.11 of its potential returns per unit of risk. KraneShares Artificial Intelligence is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,480 in KraneShares Artificial Intelligence on September 3, 2024 and sell it today you would earn a total of 383.00 from holding KraneShares Artificial Intelligence or generate 15.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 38.87% |
| Values | Daily Returns |
Vanguard Small Cap Growth vs. KraneShares Artificial Intelli
Performance |
| Timeline |
| Vanguard Small Cap |
| KraneShares Artificial |
Vanguard Small and KraneShares Artificial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and KraneShares Artificial
The main advantage of trading using opposite Vanguard Small and KraneShares Artificial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, KraneShares Artificial 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 Artificial will offset losses from the drop in KraneShares Artificial's long position.| Vanguard Small vs. Vanguard Mid Cap Growth | Vanguard Small vs. Vanguard Small Cap Value | Vanguard Small vs. Vanguard Mid Cap Value | Vanguard Small vs. Vanguard Growth Index |
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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 Stocks Directory module to find actively traded stocks across global markets.
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