Correlation Between PIMCO RAFI and KraneShares
Can any of the company-specific risk be diversified away by investing in both PIMCO RAFI 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 PIMCO RAFI and KraneShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO RAFI Dynamic and KraneShares, you can compare the effects of market volatilities on PIMCO RAFI 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 PIMCO RAFI with a short position of KraneShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO RAFI and KraneShares.
Diversification Opportunities for PIMCO RAFI and KraneShares
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between PIMCO and KraneShares is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO RAFI Dynamic and KraneShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares and PIMCO RAFI 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 PIMCO RAFI Dynamic 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 PIMCO RAFI i.e., PIMCO RAFI and KraneShares go up and down completely randomly.
Pair Corralation between PIMCO RAFI and KraneShares
If you would invest 3,885 in PIMCO RAFI Dynamic on February 12, 2024 and sell it today you would earn a total of 728.00 from holding PIMCO RAFI Dynamic or generate 18.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 1.61% |
Values | Daily Returns |
PIMCO RAFI Dynamic vs. KraneShares
Performance |
Timeline |
PIMCO RAFI Dynamic |
KraneShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PIMCO RAFI and KraneShares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PIMCO RAFI and KraneShares
The main advantage of trading using opposite PIMCO RAFI and KraneShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO RAFI 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.PIMCO RAFI vs. Invesco Russell 1000 | PIMCO RAFI vs. iShares MSCI USA | PIMCO RAFI vs. Morningstar Unconstrained Allocation |
KraneShares vs. AAM SP Developed | KraneShares vs. Global X MSCI | KraneShares vs. AAM SP 500 | KraneShares vs. ALPS Emerging Sector |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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