Correlation Between Kinetics Global and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Kinetics 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 Kinetics 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 Kinetics Global Fund and Kinetics Small Cap, you can compare the effects of market volatilities on Kinetics 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 Kinetics Global with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Kinetics Small.
Diversification Opportunities for Kinetics Global and Kinetics Small
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Kinetics and KINETICS is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund 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 Kinetics 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 Kinetics Global Fund 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 Kinetics Global i.e., Kinetics Global and Kinetics Small go up and down completely randomly.
Pair Corralation between Kinetics Global and Kinetics Small
Assuming the 90 days horizon Kinetics Global is expected to generate 1.31 times less return on investment than Kinetics Small. But when comparing it to its historical volatility, Kinetics Global Fund is 1.43 times less risky than Kinetics Small. It trades about 0.51 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 15,084 in Kinetics Small Cap on August 25, 2024 and sell it today you would earn a total of 7,297 from holding Kinetics Small Cap or generate 48.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Global Fund vs. Kinetics Small Cap
Performance |
| Timeline |
| Kinetics Global |
| Kinetics Small Cap |
Kinetics Global and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Kinetics Small
The main advantage of trading using opposite Kinetics Global and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics 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.| Kinetics Global vs. Kinetics Internet Fund | Kinetics Global vs. Kinetics Paradigm Fund | Kinetics Global vs. Jacob Internet Fund | Kinetics Global vs. Kinetics Small Cap |
| Kinetics Small vs. Kinetics Global Fund | Kinetics Small vs. Kinetics Global Fund | Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Internet 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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