Correlation Between Guidemark Smallmid and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Guidemark Smallmid 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 Guidemark Smallmid and Kinetics Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Smallmid Cap and Kinetics Small Cap, you can compare the effects of market volatilities on Guidemark Smallmid 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 Guidemark Smallmid with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Smallmid and Kinetics Small.
Diversification Opportunities for Guidemark Smallmid and Kinetics Small
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guidemark and Kinetics is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Smallmid Cap 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 Guidemark Smallmid 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 Guidemark Smallmid Cap 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 Guidemark Smallmid i.e., Guidemark Smallmid and Kinetics Small go up and down completely randomly.
Pair Corralation between Guidemark Smallmid and Kinetics Small
Assuming the 90 days horizon Guidemark Smallmid Cap is expected to generate 0.25 times more return on investment than Kinetics Small. However, Guidemark Smallmid Cap is 3.94 times less risky than Kinetics Small. It trades about 0.1 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about -0.11 per unit of risk. If you would invest 2,231 in Guidemark Smallmid Cap on September 14, 2024 and sell it today you would earn a total of 38.00 from holding Guidemark Smallmid Cap or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidemark Smallmid Cap vs. Kinetics Small Cap
Performance |
| Timeline |
| Guidemark Smallmid Cap |
| Kinetics Small Cap |
Guidemark Smallmid and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark Smallmid and Kinetics Small
The main advantage of trading using opposite Guidemark Smallmid and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Smallmid 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.| Guidemark Smallmid vs. Fidelity Advisor Gold | Guidemark Smallmid vs. James Balanced Golden | Guidemark Smallmid vs. Vy Goldman Sachs | Guidemark Smallmid vs. Oppenheimer Gold Special |
| Kinetics Small vs. Allianzgi Technology Fund | Kinetics Small vs. Dreyfus Technology Growth | Kinetics Small vs. Pgim Jennison Technology | Kinetics Small vs. Mfs 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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