Correlation Between Hartford Moderate and Kinetics Paradigm
Can any of the company-specific risk be diversified away by investing in both Hartford Moderate 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 Hartford Moderate and Kinetics Paradigm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Moderate Allocation and Kinetics Paradigm Fund, you can compare the effects of market volatilities on Hartford Moderate 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 Hartford Moderate with a short position of Kinetics Paradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Moderate and Kinetics Paradigm.
Diversification Opportunities for Hartford Moderate and Kinetics Paradigm
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HARTFORD and Kinetics is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Moderate Allocation and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm and Hartford Moderate 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 Hartford Moderate Allocation 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 Hartford Moderate i.e., Hartford Moderate and Kinetics Paradigm go up and down completely randomly.
Pair Corralation between Hartford Moderate and Kinetics Paradigm
Assuming the 90 days horizon Hartford Moderate is expected to generate 20.57 times less return on investment than Kinetics Paradigm. But when comparing it to its historical volatility, Hartford Moderate Allocation is 6.74 times less risky than Kinetics Paradigm. It trades about 0.14 of its potential returns per unit of risk. Kinetics Paradigm Fund is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 12,796 in Kinetics Paradigm Fund on August 30, 2024 and sell it today you would earn a total of 4,243 from holding Kinetics Paradigm Fund or generate 33.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Moderate Allocation vs. Kinetics Paradigm Fund
Performance |
| Timeline |
| Hartford Moderate |
| Kinetics Paradigm |
Hartford Moderate and Kinetics Paradigm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Moderate and Kinetics Paradigm
The main advantage of trading using opposite Hartford Moderate and Kinetics Paradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Moderate 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.| Hartford Moderate vs. The Hartford Growth | Hartford Moderate vs. The Hartford Growth | Hartford Moderate vs. The Hartford Growth | Hartford Moderate vs. The Hartford Growth |
| Kinetics Paradigm vs. Hartford Moderate Allocation | Kinetics Paradigm vs. Fundamental Large Cap | Kinetics Paradigm vs. Upright Assets Allocation | Kinetics Paradigm vs. Alternative Asset Allocation |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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