Correlation Between KraneShares Hang and Kewaunee Scientific

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

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

Diversification Opportunities for KraneShares Hang and Kewaunee Scientific

-0.49

Correlation Coefficient

KraneShares Hang  Kewaunee Scientific

Very good diversification

The 3 months correlation between KraneShares and Kewaunee is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Hang Seng and Kewaunee Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kewaunee Scientific and KraneShares Hang 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 Hang Seng are associated (or correlated) with Kewaunee Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kewaunee Scientific has no effect on the direction of KraneShares Hang i.e., KraneShares Hang and Kewaunee Scientific go up and down completely randomly.

Pair Corralation between KraneShares Hang and Kewaunee Scientific

Given the investment horizon of 90 days KraneShares Hang Seng is expected to generate 0.99 times more return on investment than Kewaunee Scientific. However, KraneShares Hang Seng is 1.01 times less risky than Kewaunee Scientific. It trades about 0.12 of its potential returns per unit of risk. Kewaunee Scientific is currently generating about 0.02 per unit of risk. If you would invest  1,083  in KraneShares Hang Seng on September 12, 2024 and sell it today you would earn a total of  309.21  from holding KraneShares Hang Seng or generate 28.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

KraneShares Hang Seng  vs.  Kewaunee Scientific

KraneShares Hang Seng

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KraneShares Hang Seng are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, KraneShares Hang exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kewaunee Scientific

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kewaunee Scientific are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Kewaunee Scientific is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with KraneShares Hang and Kewaunee Scientific

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

The idea behind KraneShares Hang Seng and Kewaunee Scientific 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.