Correlation Between IQ Candriam and KraneShares

Can any of the company-specific risk be diversified away by investing in both IQ Candriam 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 IQ Candriam and KraneShares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IQ Candriam ESG and KraneShares, you can compare the effects of market volatilities on IQ Candriam 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 IQ Candriam with a short position of KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Candriam and KraneShares.

Diversification Opportunities for IQ Candriam and KraneShares

0.49

Correlation Coefficient

IQ Candriam  KraneShares

Very weak diversification

The 3 months correlation between IQSI and KraneShares is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding IQ Candriam ESG and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares and IQ Candriam 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 IQ Candriam ESG 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 IQ Candriam i.e., IQ Candriam and KraneShares go up and down completely randomly.

Pair Corralation between IQ Candriam and KraneShares

Given the investment horizon of 90 days IQ Candriam ESG is expected to generate 0.5 times more return on investment than KraneShares. However, IQ Candriam ESG is 2.01 times less risky than KraneShares. It trades about 0.04 of its potential returns per unit of risk. KraneShares is currently generating about -0.06 per unit of risk. If you would invest  2,510  in IQ Candriam ESG on October 11, 2024 and sell it today you would earn a total of  368.00  from holding IQ Candriam ESG or generate 14.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	25.81%
Values	Daily Returns

IQ Candriam ESG  vs.  KraneShares

IQ Candriam ESG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQ Candriam ESG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

KraneShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KraneShares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KraneShares is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IQ Candriam and KraneShares

The main advantage of trading using opposite IQ Candriam and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ Candriam 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.

The idea behind IQ Candriam ESG and KraneShares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.