Correlation Between High Yield and Kinetics Paradigm
Can any of the company-specific risk be diversified away by investing in both High Yield and Kinetics Paradigm 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 High Yield and Kinetics Paradigm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Municipal Fund and Kinetics Paradigm Fund, you can compare the effects of market volatilities on High Yield and Kinetics Paradigm 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 High Yield with a short position of Kinetics Paradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Kinetics Paradigm.
Diversification Opportunities for High Yield and Kinetics Paradigm
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between High and Kinetics is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm and High Yield 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 High Yield Municipal Fund are associated (or correlated) with Kinetics Paradigm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Paradigm has no effect on the direction of High Yield i.e., High Yield and Kinetics Paradigm go up and down completely randomly.
Pair Corralation between High Yield and Kinetics Paradigm
Assuming the 90 days horizon High Yield Municipal Fund is expected to under-perform the Kinetics Paradigm. But the mutual fund apears to be less risky and, when comparing its historical volatility, High Yield Municipal Fund is 6.62 times less risky than Kinetics Paradigm. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Kinetics Paradigm Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 14,400 in Kinetics Paradigm Fund on November 4, 2024 and sell it today you would earn a total of 796.00 from holding Kinetics Paradigm Fund or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Municipal Fund vs. Kinetics Paradigm Fund
Performance |
| Timeline |
| High Yield Municipal |
| Kinetics Paradigm |
High Yield and Kinetics Paradigm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Kinetics Paradigm
The main advantage of trading using opposite High Yield and Kinetics Paradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Kinetics Paradigm 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 Kinetics Paradigm will offset losses from the drop in Kinetics Paradigm's long position.| High Yield vs. High Yield Fund Investor | High Yield vs. Intermediate Term Tax Free Bond | High Yield vs. California High Yield Municipal | High Yield vs. T Rowe Price |
| Kinetics Paradigm vs. Kinetics Small Cap | Kinetics Paradigm vs. Marsico 21st Century | Kinetics Paradigm vs. Royce Smaller Companies Growth | Kinetics Paradigm vs. Hodges Fund Retail |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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