Correlation Between KSET and KraneShares European

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

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

Diversification Opportunities for KSET and KraneShares European

0.0

Correlation Coefficient

KSET  KraneShares European

Pay attention - limited upside

The 3 months correlation between KSET and KraneShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KSET and KraneShares European Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares European 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 European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares European has no effect on the direction of KSET i.e., KSET and KraneShares European go up and down completely randomly.

Pair Corralation between KSET and KraneShares European

If you would invest  2,123  in KraneShares European Carbon on October 11, 2024 and sell it today you would lose (3.00) from holding KraneShares European Carbon or give up 0.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

KSET  vs.  KraneShares European 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 European

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KraneShares European Carbon are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KraneShares European is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KSET and KraneShares European

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

The idea behind KSET and KraneShares European 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.