Correlation Between Columbia and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both Columbia 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 Columbia and KraneShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia EM Core and KraneShares MSCI All, you can compare the effects of market volatilities on Columbia 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 Columbia with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia and KraneShares MSCI.
Diversification Opportunities for Columbia and KraneShares MSCI
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Columbia and KraneShares is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Columbia EM Core and KraneShares MSCI All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI All and Columbia 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 Columbia EM Core 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 All has no effect on the direction of Columbia i.e., Columbia and KraneShares MSCI go up and down completely randomly.
Pair Corralation between Columbia and KraneShares MSCI
Given the investment horizon of 90 days Columbia EM Core is expected to generate 0.34 times more return on investment than KraneShares MSCI. However, Columbia EM Core is 2.9 times less risky than KraneShares MSCI. It trades about -0.13 of its potential returns per unit of risk. KraneShares MSCI All is currently generating about -0.06 per unit of risk. If you would invest 3,172 in Columbia EM Core on September 1, 2024 and sell it today you would lose (66.00) from holding Columbia EM Core or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia EM Core vs. KraneShares MSCI All
Performance |
| Timeline |
| Columbia EM Core |
| KraneShares MSCI All |
Columbia and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia and KraneShares MSCI
The main advantage of trading using opposite Columbia and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia 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.| Columbia vs. Xtrackers MSCI Emerging | Columbia vs. FlexShares Morningstar Emerging | Columbia vs. First Trust Emerging |
| KraneShares MSCI vs. Xtrackers Harvest CSI | KraneShares MSCI vs. Aquagold International | KraneShares MSCI vs. Thrivent High Yield | KraneShares MSCI vs. Morningstar Unconstrained Allocation |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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