Correlation Between KraneShares CSI and EMQQ Emerging

Can any of the company-specific risk be diversified away by investing in both KraneShares CSI and EMQQ Emerging 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 EMQQ Emerging 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 EMQQ The Emerging, you can compare the effects of market volatilities on KraneShares CSI and EMQQ Emerging 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 EMQQ Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares CSI and EMQQ Emerging.

Diversification Opportunities for KraneShares CSI and EMQQ Emerging

0.89

Correlation Coefficient

KraneShares CSI  EMQQ Emerging

Very poor diversification

The 3 months correlation between KraneShares and EMQQ is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares CSI China and EMQQ The Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMQQ The Emerging 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 EMQQ Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMQQ The Emerging has no effect on the direction of KraneShares CSI i.e., KraneShares CSI and EMQQ Emerging go up and down completely randomly.

Pair Corralation between KraneShares CSI and EMQQ Emerging

Given the investment horizon of 90 days KraneShares CSI is expected to generate 1.18 times less return on investment than EMQQ Emerging. In addition to that, KraneShares CSI is 1.59 times more volatile than EMQQ The Emerging. It trades about 0.03 of its total potential returns per unit of risk. EMQQ The Emerging is currently generating about 0.06 per unit of volatility. If you would invest  3,938  in EMQQ The Emerging on May 3, 2025 and sell it today you would earn a total of  144.00  from holding EMQQ The Emerging or generate 3.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

KraneShares CSI China  vs.  EMQQ The Emerging

KraneShares CSI China

Risk-Adjusted Performance

Insignificant

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

EMQQ The Emerging

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EMQQ The Emerging are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, EMQQ Emerging 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 CSI and EMQQ Emerging

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

The idea behind KraneShares CSI China and EMQQ The Emerging 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.