Correlation Between Kinetics Global and Short Duration
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Short Duration 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 Short Duration 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 Short Duration Bond, you can compare the effects of market volatilities on Kinetics Global and Short Duration 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 Short Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Short Duration.
Diversification Opportunities for Kinetics Global and Short Duration
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinetics and Short is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Short Duration Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Duration Bond 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 Short Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Duration Bond has no effect on the direction of Kinetics Global i.e., Kinetics Global and Short Duration go up and down completely randomly.
Pair Corralation between Kinetics Global and Short Duration
Assuming the 90 days horizon Kinetics Global Fund is expected to generate 12.83 times more return on investment than Short Duration. However, Kinetics Global is 12.83 times more volatile than Short Duration Bond. It trades about 0.19 of its potential returns per unit of risk. Short Duration Bond is currently generating about 0.25 per unit of risk. If you would invest 1,501 in Kinetics Global Fund on November 3, 2024 and sell it today you would earn a total of 68.00 from holding Kinetics Global Fund or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Global Fund vs. Short Duration Bond
Performance |
| Timeline |
| Kinetics Global |
| Short Duration Bond |
Kinetics Global and Short Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Short Duration
The main advantage of trading using opposite Kinetics Global and Short Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Short Duration 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 Short Duration will offset losses from the drop in Short Duration's long position.| Kinetics Global vs. Voya Retirement Servative | Kinetics Global vs. Wilmington Trust Retirement | Kinetics Global vs. Blackrock Moderate Prepared | Kinetics Global vs. Dimensional Retirement Income |
| Short Duration vs. Virtus Convertible | Short Duration vs. Putnam Convertible Securities | Short Duration vs. Rationalpier 88 Convertible | Short Duration vs. Advent Claymore Convertible |
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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