Correlation Between GM and Kinetics Alternative
Can any of the company-specific risk be diversified away by investing in both GM and Kinetics Alternative 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 GM and Kinetics Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Kinetics Alternative Income, you can compare the effects of market volatilities on GM and Kinetics Alternative 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 GM with a short position of Kinetics Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Kinetics Alternative.
Diversification Opportunities for GM and Kinetics Alternative
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and KINETICS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Kinetics Alternative Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Alternative and GM 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 General Motors are associated (or correlated) with Kinetics Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Alternative has no effect on the direction of GM i.e., GM and Kinetics Alternative go up and down completely randomly.
Pair Corralation between GM and Kinetics Alternative
If you would invest 3,324 in General Motors on September 2, 2024 and sell it today you would earn a total of 2,235 from holding General Motors or generate 67.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
General Motors vs. Kinetics Alternative Income
Performance |
| Timeline |
| General Motors |
| Kinetics Alternative |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Kinetics Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Kinetics Alternative
The main advantage of trading using opposite GM and Kinetics Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Kinetics Alternative 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 Alternative will offset losses from the drop in Kinetics Alternative's long position.The idea behind General Motors and Kinetics Alternative Income 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 Alternative vs. Pace Municipal Fixed | Kinetics Alternative vs. Bbh Intermediate Municipal | Kinetics Alternative vs. Franklin High Yield | Kinetics Alternative vs. Ab Impact 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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