Correlation Between Akros Monthly and KraneShares

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

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

Diversification Opportunities for Akros Monthly and KraneShares

-0.55

Correlation Coefficient

Akros Monthly  KraneShares

Excellent diversification

The 3 months correlation between Akros and KraneShares is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Akros Monthly Payout and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares and Akros Monthly 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 Akros Monthly Payout 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 Akros Monthly i.e., Akros Monthly and KraneShares go up and down completely randomly.

Pair Corralation between Akros Monthly and KraneShares

Given the investment horizon of 90 days Akros Monthly Payout is expected to under-perform the KraneShares. In addition to that, Akros Monthly is 2.61 times more volatile than KraneShares. It trades about -0.03 of its total potential returns per unit of risk. KraneShares is currently generating about 0.0 per unit of volatility. If you would invest  1,529  in KraneShares on September 20, 2024 and sell it today you would lose (89.00) from holding KraneShares or give up 5.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.1%
Values	Daily Returns

Akros Monthly Payout  vs.  KraneShares

Akros Monthly Payout

Risk-Adjusted Performance

1 of 100

Weak

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

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.

Pair Trading with Akros Monthly and KraneShares

The main advantage of trading using opposite Akros Monthly and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akros Monthly 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 Akros Monthly Payout 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.