Correlation Between KraneShares CSI and Janus Henderson

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

Diversification Opportunities for KraneShares CSI and Janus Henderson

0.77

Correlation Coefficient

KraneShares CSI  Janus Henderson

Poor diversification

The 3 months correlation between KraneShares and Janus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares CSI China and Janus Henderson Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson Small 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 Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Small has no effect on the direction of KraneShares CSI i.e., KraneShares CSI and Janus Henderson go up and down completely randomly.

Pair Corralation between KraneShares CSI and Janus Henderson

Given the investment horizon of 90 days KraneShares CSI is expected to generate 1.25 times less return on investment than Janus Henderson. In addition to that, KraneShares CSI is 1.44 times more volatile than Janus Henderson Small. It trades about 0.12 of its total potential returns per unit of risk. Janus Henderson Small is currently generating about 0.22 per unit of volatility. If you would invest  5,859  in Janus Henderson Small on April 30, 2025 and sell it today you would earn a total of  949.00  from holding Janus Henderson Small or generate 16.2% return on investment over 90 days.

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

KraneShares CSI China  vs.  Janus Henderson Small

KraneShares CSI China

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KraneShares CSI China are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent technical and fundamental indicators, KraneShares CSI sustained solid returns over the last few months and may actually be approaching a breakup point.

Janus Henderson Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Janus Henderson Small are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, Janus Henderson disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KraneShares CSI and Janus Henderson

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

The idea behind KraneShares CSI China and Janus Henderson Small 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.