Correlation Between Kinetics Global and Global Opportunity
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Global Opportunity 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 Opportunity 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 Opportunity Portfolio, you can compare the effects of market volatilities on Kinetics Global and Global Opportunity 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 Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Global Opportunity.
Diversification Opportunities for Kinetics Global and Global Opportunity
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Global is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Global Opportunity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunity 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 Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunity has no effect on the direction of Kinetics Global i.e., Kinetics Global and Global Opportunity go up and down completely randomly.
Pair Corralation between Kinetics Global and Global Opportunity
Assuming the 90 days horizon Kinetics Global Fund is expected to generate 1.33 times more return on investment than Global Opportunity. However, Kinetics Global is 1.33 times more volatile than Global Opportunity Portfolio. It trades about 0.15 of its potential returns per unit of risk. Global Opportunity Portfolio is currently generating about 0.09 per unit of risk. If you would invest 755.00 in Kinetics Global Fund on September 12, 2024 and sell it today you would earn a total of 789.00 from holding Kinetics Global Fund or generate 104.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Kinetics Global Fund vs. Global Opportunity Portfolio
Performance |
| Timeline |
| Kinetics Global |
| Global Opportunity |
Kinetics Global and Global Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Global Opportunity
The main advantage of trading using opposite Kinetics Global and Global Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Global Opportunity 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 Opportunity will offset losses from the drop in Global Opportunity's long position.| Kinetics Global vs. Pace Smallmedium Value | Kinetics Global vs. Small Pany Growth | Kinetics Global vs. Champlain Small | Kinetics Global vs. Glg Intl Small |
| Global Opportunity vs. Dreyfusstandish Global Fixed | Global Opportunity vs. Investec Global Franchise | Global Opportunity vs. Mirova Global Green | Global Opportunity vs. Kinetics Global 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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