Correlation Between Kinetics Global and Global Gold
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Global Gold 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 Global Gold 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 Global Gold Fund, you can compare the effects of market volatilities on Kinetics Global and Global Gold 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 Global Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Global Gold.
Diversification Opportunities for Kinetics Global and Global Gold
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Global is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Global Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gold Fund 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 Global Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gold Fund has no effect on the direction of Kinetics Global i.e., Kinetics Global and Global Gold go up and down completely randomly.
Pair Corralation between Kinetics Global and Global Gold
Assuming the 90 days horizon Kinetics Global is expected to generate 2.74 times less return on investment than Global Gold. But when comparing it to its historical volatility, Kinetics Global Fund is 1.01 times less risky than Global Gold. It trades about 0.06 of its potential returns per unit of risk. Global Gold Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,216 in Global Gold Fund on September 15, 2024 and sell it today you would earn a total of 73.00 from holding Global Gold Fund or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Global Fund vs. Global Gold Fund
Performance |
| Timeline |
| Kinetics Global |
| Global Gold Fund |
Kinetics Global and Global Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Global Gold
The main advantage of trading using opposite Kinetics Global and Global Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Global Gold 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 Global Gold will offset losses from the drop in Global Gold's long position.| Kinetics Global vs. Lord Abbett Affiliated | Kinetics Global vs. Dunham Large Cap | Kinetics Global vs. Virtus Nfj Large Cap | Kinetics Global vs. M Large Cap |
| Global Gold vs. Kinetics Global Fund | Global Gold vs. Scharf Global Opportunity | Global Gold vs. Dreyfusstandish Global Fixed | Global Gold vs. Ab Global Bond |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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