Correlation Between KraneShares and KraneShares

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

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

Diversification Opportunities for KraneShares and KraneShares

0.62

Correlation Coefficient

KraneShares  KraneShares

Poor diversification

The 3 months correlation between KraneShares and KraneShares is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares and KraneShares 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 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 KraneShares i.e., KraneShares and KraneShares go up and down completely randomly.

Pair Corralation between KraneShares and KraneShares

Given the investment horizon of 90 days KraneShares is expected to generate 1.27 times more return on investment than KraneShares. However, KraneShares is 1.27 times more volatile than KraneShares. It trades about 0.01 of its potential returns per unit of risk. KraneShares is currently generating about -0.07 per unit of risk. If you would invest  1,901  in KraneShares on September 20, 2024 and sell it today you would lose (5.00) from holding KraneShares or give up 0.26% of portfolio value over 90 days.

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

KraneShares  vs.  KraneShares

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.

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. In spite of rather sound technical and fundamental indicators, KraneShares is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with KraneShares and KraneShares

The main advantage of trading using opposite KraneShares and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares 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 KraneShares 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.