Correlation Between KraneShares Bosera and Franklin FTSE

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

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

Diversification Opportunities for KraneShares Bosera and Franklin FTSE

0.98

Correlation Coefficient

KraneShares Bosera  Franklin FTSE

Almost no diversification

The 3 months correlation between KraneShares and Franklin is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Bosera MSCI and Franklin FTSE China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE China and KraneShares Bosera 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 KraneShares Bosera MSCI are associated (or correlated) with Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE China has no effect on the direction of KraneShares Bosera i.e., KraneShares Bosera and Franklin FTSE go up and down completely randomly.

Pair Corralation between KraneShares Bosera and Franklin FTSE

Considering the 90-day investment horizon KraneShares Bosera MSCI is expected to under-perform the Franklin FTSE. But the etf apears to be less risky and, when comparing its historical volatility, KraneShares Bosera MSCI is 1.13 times less risky than Franklin FTSE. The etf trades about -0.01 of its potential returns per unit of risk. The Franklin FTSE China is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,981  in Franklin FTSE China on October 10, 2024 and sell it today you would lose (197.00) from holding Franklin FTSE China or give up 9.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

KraneShares Bosera MSCI  vs.  Franklin FTSE China

KraneShares Bosera MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KraneShares Bosera MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Franklin FTSE China

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with KraneShares Bosera and Franklin FTSE

The main advantage of trading using opposite KraneShares Bosera and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Bosera position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.

The idea behind KraneShares Bosera MSCI and Franklin FTSE China 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.