Correlation Between California High-yield and Kinetics Paradigm
Can any of the company-specific risk be diversified away by investing in both California 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 California 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 California High Yield Municipal and Kinetics Paradigm Fund, you can compare the effects of market volatilities on California 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 California High-yield with a short position of Kinetics Paradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High-yield and Kinetics Paradigm.
Diversification Opportunities for California High-yield and Kinetics Paradigm
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between California and Kinetics is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm and California 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 California High Yield Municipal 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 California High-yield i.e., California High-yield and Kinetics Paradigm go up and down completely randomly.
Pair Corralation between California High-yield and Kinetics Paradigm
Assuming the 90 days horizon California High-yield is expected to generate 20.34 times less return on investment than Kinetics Paradigm. But when comparing it to its historical volatility, California High Yield Municipal is 9.46 times less risky than Kinetics Paradigm. It trades about 0.14 of its potential returns per unit of risk. Kinetics Paradigm Fund is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 7,274 in Kinetics Paradigm Fund on August 26, 2024 and sell it today you would earn a total of 9,163 from holding Kinetics Paradigm Fund or generate 125.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. Kinetics Paradigm Fund
Performance |
| Timeline |
| California High Yield |
| Kinetics Paradigm |
California High-yield and Kinetics Paradigm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High-yield and Kinetics Paradigm
The main advantage of trading using opposite California High-yield and Kinetics Paradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California 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.| California High-yield vs. Rbc Microcap Value | California High-yield vs. Acm Dynamic Opportunity | California High-yield vs. Iaadx | California High-yield vs. Rbb Fund |
| Kinetics Paradigm vs. Goldman Sachs High | Kinetics Paradigm vs. Morningstar Aggressive Growth | Kinetics Paradigm vs. Metropolitan West High | Kinetics Paradigm vs. California High Yield Municipal |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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