Correlation Between Citigroup and Kinetics Internet
Can any of the company-specific risk be diversified away by investing in both Citigroup and Kinetics Internet 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 Citigroup and Kinetics Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Kinetics Internet Fund, you can compare the effects of market volatilities on Citigroup and Kinetics Internet 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 Citigroup with a short position of Kinetics Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Kinetics Internet.
Diversification Opportunities for Citigroup and Kinetics Internet
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citigroup and Kinetics is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Kinetics Internet Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Internet and Citigroup 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 Citigroup are associated (or correlated) with Kinetics Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Internet has no effect on the direction of Citigroup i.e., Citigroup and Kinetics Internet go up and down completely randomly.
Pair Corralation between Citigroup and Kinetics Internet
Taking into account the 90-day investment horizon Citigroup is expected to generate 2.38 times less return on investment than Kinetics Internet. But when comparing it to its historical volatility, Citigroup is 1.26 times less risky than Kinetics Internet. It trades about 0.25 of its potential returns per unit of risk. Kinetics Internet Fund is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 9,054 in Kinetics Internet Fund on August 28, 2024 and sell it today you would earn a total of 2,499 from holding Kinetics Internet Fund or generate 27.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. Kinetics Internet Fund
Performance |
| Timeline |
| Citigroup |
| Kinetics Internet |
Citigroup and Kinetics Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Kinetics Internet
The main advantage of trading using opposite Citigroup and Kinetics Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Kinetics Internet 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 Internet will offset losses from the drop in Kinetics Internet's long position.The idea behind Citigroup and Kinetics Internet Fund 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.| Kinetics Internet vs. Victory Munder Multi Cap | Kinetics Internet vs. Tomorrows Scholar College | Kinetics Internet vs. Janus Global Technology | Kinetics Internet vs. Invesco Technology Fund |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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