Correlation Between Kinetics Global and Conestoga Micro
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Conestoga Micro 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 Conestoga Micro 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 Conestoga Micro Cap, you can compare the effects of market volatilities on Kinetics Global and Conestoga Micro 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 Conestoga Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Conestoga Micro.
Diversification Opportunities for Kinetics Global and Conestoga Micro
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Conestoga is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Conestoga Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Micro 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 Conestoga Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Micro Cap has no effect on the direction of Kinetics Global i.e., Kinetics Global and Conestoga Micro go up and down completely randomly.
Pair Corralation between Kinetics Global and Conestoga Micro
Assuming the 90 days horizon Kinetics Global Fund is expected to generate 0.86 times more return on investment than Conestoga Micro. However, Kinetics Global Fund is 1.16 times less risky than Conestoga Micro. It trades about 0.11 of its potential returns per unit of risk. Conestoga Micro Cap is currently generating about 0.03 per unit of risk. If you would invest 794.00 in Kinetics Global Fund on September 14, 2024 and sell it today you would earn a total of 737.00 from holding Kinetics Global Fund or generate 92.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Global Fund vs. Conestoga Micro Cap
Performance |
| Timeline |
| Kinetics Global |
| Conestoga Micro Cap |
Kinetics Global and Conestoga Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Conestoga Micro
The main advantage of trading using opposite Kinetics Global and Conestoga Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Conestoga Micro 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 Conestoga Micro will offset losses from the drop in Conestoga Micro's long position.| Kinetics Global vs. Nasdaq 100 Index Fund | Kinetics Global vs. Ab Value Fund | Kinetics Global vs. Volumetric Fund Volumetric | Kinetics Global vs. Auer Growth Fund |
| Conestoga Micro vs. Ab Global Risk | Conestoga Micro vs. Artisan Global Unconstrained | Conestoga Micro vs. Kinetics Global Fund | Conestoga Micro vs. Legg Mason Global |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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