Correlation Between Vanguard Value and KraneShares Trust
Can any of the company-specific risk be diversified away by investing in both Vanguard Value and KraneShares Trust 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 Value and KraneShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Value Index and KraneShares Trust, you can compare the effects of market volatilities on Vanguard Value and KraneShares Trust 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 Value with a short position of KraneShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and KraneShares Trust.
Diversification Opportunities for Vanguard Value and KraneShares Trust
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and KraneShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and KraneShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Trust and Vanguard Value 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 Value Index are associated (or correlated) with KraneShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Trust has no effect on the direction of Vanguard Value i.e., Vanguard Value and KraneShares Trust go up and down completely randomly.
Pair Corralation between Vanguard Value and KraneShares Trust
Considering the 90-day investment horizon Vanguard Value Index is expected to generate 1.57 times more return on investment than KraneShares Trust. However, Vanguard Value is 1.57 times more volatile than KraneShares Trust. It trades about 0.35 of its potential returns per unit of risk. KraneShares Trust is currently generating about 0.14 per unit of risk. If you would invest 16,930 in Vanguard Value Index on November 1, 2024 and sell it today you would earn a total of 846.00 from holding Vanguard Value Index or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Value Index vs. KraneShares Trust
Performance |
| Timeline |
| Vanguard Value Index |
| KraneShares Trust |
Vanguard Value and KraneShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and KraneShares Trust
The main advantage of trading using opposite Vanguard Value and KraneShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value position performs unexpectedly, KraneShares Trust 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 Trust will offset losses from the drop in KraneShares Trust's long position.| Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
| KraneShares Trust vs. Innovator SP 500 | KraneShares Trust vs. Innovator SP 500 | KraneShares Trust vs. Innovator SP 500 | KraneShares Trust vs. Innovator Equity Power |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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