Correlation Between Barings Active and Kinetics Market
Can any of the company-specific risk be diversified away by investing in both Barings Active and Kinetics Market 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 Barings Active and Kinetics Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Kinetics Market Opportunities, you can compare the effects of market volatilities on Barings Active and Kinetics Market 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 Barings Active with a short position of Kinetics Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Kinetics Market.
Diversification Opportunities for Barings Active and Kinetics Market
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Kinetics is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Kinetics Market Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Market Oppo and Barings Active 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 Barings Active Short are associated (or correlated) with Kinetics Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Market Oppo has no effect on the direction of Barings Active i.e., Barings Active and Kinetics Market go up and down completely randomly.
Pair Corralation between Barings Active and Kinetics Market
Assuming the 90 days horizon Barings Active is expected to generate 124.64 times less return on investment than Kinetics Market. But when comparing it to its historical volatility, Barings Active Short is 25.09 times less risky than Kinetics Market. It trades about 0.09 of its potential returns per unit of risk. Kinetics Market Opportunities is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 6,902 in Kinetics Market Opportunities on September 1, 2024 and sell it today you would earn a total of 2,067 from holding Kinetics Market Opportunities or generate 29.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Kinetics Market Opportunities
Performance |
| Timeline |
| Barings Active Short |
| Kinetics Market Oppo |
Barings Active and Kinetics Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Kinetics Market
The main advantage of trading using opposite Barings Active and Kinetics Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Kinetics Market 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 Market will offset losses from the drop in Kinetics Market's long position.| Barings Active vs. Ab Bond Inflation | Barings Active vs. Western Asset Inflation | Barings Active vs. Blackrock Inflation Protected | Barings Active vs. Aqr Managed Futures |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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