Correlation Between Calvert Global and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Calvert Global and Kinetics Small 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 Calvert Global and Kinetics Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Global Energy and Kinetics Small Cap, you can compare the effects of market volatilities on Calvert Global and Kinetics Small 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 Calvert Global with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Global and Kinetics Small.
Diversification Opportunities for Calvert Global and Kinetics Small
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Calvert and Kinetics is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Global Energy and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and Calvert Global 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 Calvert Global Energy are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Calvert Global i.e., Calvert Global and Kinetics Small go up and down completely randomly.
Pair Corralation between Calvert Global and Kinetics Small
Assuming the 90 days horizon Calvert Global is expected to generate 28.8 times less return on investment than Kinetics Small. But when comparing it to its historical volatility, Calvert Global Energy is 1.52 times less risky than Kinetics Small. It trades about 0.01 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 11,762 in Kinetics Small Cap on September 12, 2024 and sell it today you would earn a total of 8,144 from holding Kinetics Small Cap or generate 69.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Global Energy vs. Kinetics Small Cap
Performance |
| Timeline |
| Calvert Global Energy |
| Kinetics Small Cap |
Calvert Global and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Global and Kinetics Small
The main advantage of trading using opposite Calvert Global and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Global position performs unexpectedly, Kinetics Small 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 Small will offset losses from the drop in Kinetics Small's long position.| Calvert Global vs. Kinetics Small Cap | Calvert Global vs. Lebenthal Lisanti Small | Calvert Global vs. Vy Columbia Small | Calvert Global vs. Champlain Small |
| Kinetics Small vs. Aqr Small Cap | Kinetics Small vs. Pace Smallmedium Value | Kinetics Small vs. Lebenthal Lisanti Small | Kinetics Small vs. Old Westbury Small |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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