Correlation Between Mast Global and KraneShares Trust

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

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

Diversification Opportunities for Mast Global and KraneShares Trust

0.47

Correlation Coefficient

Mast Global  KraneShares Trust

Very weak diversification

The 3 months correlation between Mast and KraneShares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and KraneShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Trust and Mast Global 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 Mast Global Battery are associated (or correlated) with KraneShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Trust has no effect on the direction of Mast Global i.e., Mast Global and KraneShares Trust go up and down completely randomly.

Pair Corralation between Mast Global and KraneShares Trust

Allowing for the 90-day total investment horizon Mast Global is expected to generate 4.38 times less return on investment than KraneShares Trust. In addition to that, Mast Global is 1.74 times more volatile than KraneShares Trust. It trades about 0.01 of its total potential returns per unit of risk. KraneShares Trust is currently generating about 0.05 per unit of volatility. If you would invest  2,497  in KraneShares Trust on September 4, 2024 and sell it today you would earn a total of  288.00  from holding KraneShares Trust or generate 11.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	77.1%
Values	Daily Returns

Mast Global Battery  vs.  KraneShares Trust

Mast Global Battery

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mast Global Battery are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Mast Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

KraneShares Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KraneShares Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, KraneShares Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mast Global and KraneShares Trust

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

The idea behind Mast Global Battery and KraneShares Trust 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.