Correlation Between KraneShares CSI and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both KraneShares CSI and IShares MSCI 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 CSI and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares CSI China and iShares MSCI Taiwan, you can compare the effects of market volatilities on KraneShares CSI and IShares MSCI 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 CSI with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares CSI and IShares MSCI.
Diversification Opportunities for KraneShares CSI and IShares MSCI
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KraneShares and IShares is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares CSI China and iShares MSCI Taiwan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Taiwan and KraneShares CSI 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 CSI China are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Taiwan has no effect on the direction of KraneShares CSI i.e., KraneShares CSI and IShares MSCI go up and down completely randomly.
Pair Corralation between KraneShares CSI and IShares MSCI
Given the investment horizon of 90 days KraneShares CSI China is expected to generate 1.65 times more return on investment than IShares MSCI. However, KraneShares CSI is 1.65 times more volatile than iShares MSCI Taiwan. It trades about 0.2 of its potential returns per unit of risk. iShares MSCI Taiwan is currently generating about -0.18 per unit of risk. If you would invest 2,605 in KraneShares CSI China on January 26, 2024 and sell it today you would earn a total of 191.00 from holding KraneShares CSI China or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares CSI China vs. iShares MSCI Taiwan
Performance |
| Timeline |
| KraneShares CSI China |
| iShares MSCI Taiwan |
KraneShares CSI and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares CSI and IShares MSCI
The main advantage of trading using opposite KraneShares CSI and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares CSI position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI's long position.| KraneShares CSI vs. iShares MSCI India | KraneShares CSI vs. HUMANA INC | KraneShares CSI vs. Aquagold International | KraneShares CSI vs. Morningstar Unconstrained Allocation |
| IShares MSCI vs. iShares MSCI India | IShares MSCI vs. HUMANA INC | IShares MSCI vs. Aquagold International | IShares MSCI vs. Morningstar Unconstrained Allocation |
Check out your portfolio center.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |