Correlation Between KraneShares Trust and IShares Dividend

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

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

Diversification Opportunities for KraneShares Trust and IShares Dividend

-0.04

Correlation Coefficient

KraneShares Trust  IShares Dividend

Good diversification

The 3 months correlation between KraneShares and IShares is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Trust and iShares Dividend and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Dividend and KraneShares Trust 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 Trust are associated (or correlated) with IShares Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Dividend has no effect on the direction of KraneShares Trust i.e., KraneShares Trust and IShares Dividend go up and down completely randomly.

Pair Corralation between KraneShares Trust and IShares Dividend

Considering the 90-day investment horizon KraneShares Trust is expected to under-perform the IShares Dividend. But the etf apears to be less risky and, when comparing its historical volatility, KraneShares Trust is 1.34 times less risky than IShares Dividend. The etf trades about -0.4 of its potential returns per unit of risk. The iShares Dividend and is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest  4,922  in iShares Dividend and on October 11, 2024 and sell it today you would lose (170.00) from holding iShares Dividend and or give up 3.45% of portfolio value over 90 days.

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

KraneShares Trust  vs.  iShares Dividend and

KraneShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KraneShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

iShares Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Dividend and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IShares Dividend is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KraneShares Trust and IShares Dividend

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

The idea behind KraneShares Trust and iShares Dividend and 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.