Correlation Between KraneShares Bosera and Invesco Golden

Can any of the company-specific risk be diversified away by investing in both KraneShares Bosera and Invesco Golden 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 Invesco Golden 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 Invesco Golden Dragon, you can compare the effects of market volatilities on KraneShares Bosera and Invesco Golden 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 Invesco Golden. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Bosera and Invesco Golden.

Diversification Opportunities for KraneShares Bosera and Invesco Golden

0.88

Correlation Coefficient

KraneShares Bosera  Invesco Golden

Very poor diversification

The 3 months correlation between KraneShares and Invesco is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Bosera MSCI and Invesco Golden Dragon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Golden Dragon 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 Invesco Golden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Golden Dragon has no effect on the direction of KraneShares Bosera i.e., KraneShares Bosera and Invesco Golden go up and down completely randomly.

Pair Corralation between KraneShares Bosera and Invesco Golden

Considering the 90-day investment horizon KraneShares Bosera MSCI is expected to under-perform the Invesco Golden. But the etf apears to be less risky and, when comparing its historical volatility, KraneShares Bosera MSCI is 1.36 times less risky than Invesco Golden. The etf trades about -0.01 of its potential returns per unit of risk. The Invesco Golden Dragon is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,956  in Invesco Golden Dragon on October 1, 2024 and sell it today you would lose (298.00) from holding Invesco Golden Dragon or give up 10.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

KraneShares Bosera MSCI  vs.  Invesco Golden Dragon

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 somewhat strong fundamental drivers, KraneShares Bosera is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco Golden Dragon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Golden Dragon has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Etf's technical and fundamental indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the ETF firm stakeholders.

Pair Trading with KraneShares Bosera and Invesco Golden

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

The idea behind KraneShares Bosera MSCI and Invesco Golden Dragon 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..