Correlation Between Dreyfus Technology and Kinetics Paradigm
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology 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 Dreyfus Technology and Kinetics Paradigm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Technology Growth and Kinetics Paradigm Fund, you can compare the effects of market volatilities on Dreyfus Technology 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 Dreyfus Technology with a short position of Kinetics Paradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Kinetics Paradigm.
Diversification Opportunities for Dreyfus Technology and Kinetics Paradigm
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Kinetics is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm and Dreyfus Technology 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 Dreyfus Technology Growth 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 Dreyfus Technology i.e., Dreyfus Technology and Kinetics Paradigm go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Kinetics Paradigm
Assuming the 90 days horizon Dreyfus Technology is expected to generate 4.18 times less return on investment than Kinetics Paradigm. But when comparing it to its historical volatility, Dreyfus Technology Growth is 3.22 times less risky than Kinetics Paradigm. It trades about 0.34 of its potential returns per unit of risk. Kinetics Paradigm Fund is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 13,200 in Kinetics Paradigm Fund on September 1, 2024 and sell it today you would earn a total of 4,483 from holding Kinetics Paradigm Fund or generate 33.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. Kinetics Paradigm Fund
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Kinetics Paradigm |
Dreyfus Technology and Kinetics Paradigm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Kinetics Paradigm
The main advantage of trading using opposite Dreyfus Technology and Kinetics Paradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology 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.| Dreyfus Technology vs. Veea Inc | Dreyfus Technology vs. VHAI | Dreyfus Technology vs. VivoPower International PLC | Dreyfus Technology vs. WEBTOON Entertainment Common |
| Kinetics Paradigm vs. Goldman Sachs Technology | Kinetics Paradigm vs. Dreyfus Technology Growth | Kinetics Paradigm vs. Science Technology Fund | Kinetics Paradigm vs. Allianzgi 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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