Correlation Between Kinetics Global and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Equity, you can compare the effects of market volatilities on Kinetics Global and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Goldman Sachs.
Diversification Opportunities for Kinetics Global and Goldman Sachs
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and Goldman is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Goldman Sachs Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Equity 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Equity has no effect on the direction of Kinetics Global i.e., Kinetics Global and Goldman Sachs go up and down completely randomly.
Pair Corralation between Kinetics Global and Goldman Sachs
Assuming the 90 days horizon Kinetics Global Fund is expected to generate 1.87 times more return on investment than Goldman Sachs. However, Kinetics Global is 1.87 times more volatile than Goldman Sachs Equity. It trades about 0.11 of its potential returns per unit of risk. Goldman Sachs Equity is currently generating about 0.1 per unit of risk. If you would invest 797.00 in Kinetics Global Fund on September 13, 2024 and sell it today you would earn a total of 747.00 from holding Kinetics Global Fund or generate 93.73% 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. Goldman Sachs Equity
Performance |
| Timeline |
| Kinetics Global |
| Goldman Sachs Equity |
Kinetics Global and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Goldman Sachs
The main advantage of trading using opposite Kinetics Global and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Kinetics Global vs. Lord Abbett Short | Kinetics Global vs. Easterly Snow Longshort | Kinetics Global vs. Boston Partners Longshort | Kinetics Global vs. Blackrock Short Term Inflat Protected |
| Goldman Sachs vs. Kinetics Global Fund | Goldman Sachs vs. Investec Global Franchise | Goldman Sachs vs. Ab Global Bond | Goldman Sachs vs. Ab Global Risk |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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