Correlation Between KSET and KraneShares California

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

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

Diversification Opportunities for KSET and KraneShares California

0.41

Correlation Coefficient

KSET  KraneShares California

Very weak diversification

The 3 months correlation between KSET and KraneShares is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding KSET and KraneShares California Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares California and KSET 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 KSET are associated (or correlated) with KraneShares California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares California has no effect on the direction of KSET i.e., KSET and KraneShares California go up and down completely randomly.

Pair Corralation between KSET and KraneShares California

If you would invest  298.00  in KSET on October 25, 2024 and sell it today you would earn a total of  0.00  from holding KSET or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.67%
Values	Daily Returns

KSET  vs.  KraneShares California Carbon

KSET

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KSET has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, KSET is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

KraneShares California

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KraneShares California Carbon has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with KSET and KraneShares California

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

The idea behind KSET and KraneShares California Carbon 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..