Correlation Between KraneShares California and Barclays Capital

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

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

Diversification Opportunities for KraneShares California and Barclays Capital

0.34

Correlation Coefficient

KraneShares California  Barclays Capital

Weak diversification

The 3 months correlation between KraneShares and Barclays is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares California Carbon and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and KraneShares California 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 California Carbon are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of KraneShares California i.e., KraneShares California and Barclays Capital go up and down completely randomly.

Pair Corralation between KraneShares California and Barclays Capital

If you would invest  2,847  in KraneShares California Carbon on February 4, 2024 and sell it today you would earn a total of  6.00  from holding KraneShares California Carbon or generate 0.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

KraneShares California Carbon  vs.  Barclays Capital

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 latest weak performance, the Etf's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Barclays Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with KraneShares California and Barclays Capital

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

The idea behind KraneShares California Carbon and Barclays Capital 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 Commodity Directory module to find actively traded commodities issued by global exchanges.