Correlation Between Kinetics Global and Salient Alternative
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Salient Alternative 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 Salient Alternative 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 Salient Alternative Beta, you can compare the effects of market volatilities on Kinetics Global and Salient Alternative 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 Salient Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Salient Alternative.
Diversification Opportunities for Kinetics Global and Salient Alternative
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KINETICS and Salient is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Salient Alternative Beta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Alternative Beta 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 Salient Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Alternative Beta has no effect on the direction of Kinetics Global i.e., Kinetics Global and Salient Alternative go up and down completely randomly.
Pair Corralation between Kinetics Global and Salient Alternative
Assuming the 90 days horizon Kinetics Global Fund is expected to generate 2.62 times more return on investment than Salient Alternative. However, Kinetics Global is 2.62 times more volatile than Salient Alternative Beta. It trades about 0.46 of its potential returns per unit of risk. Salient Alternative Beta is currently generating about 0.22 per unit of risk. If you would invest 1,327 in Kinetics Global Fund on August 29, 2024 and sell it today you would earn a total of 280.00 from holding Kinetics Global Fund or generate 21.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kinetics Global Fund vs. Salient Alternative Beta
Performance |
| Timeline |
| Kinetics Global |
| Salient Alternative Beta |
Kinetics Global and Salient Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Salient Alternative
The main advantage of trading using opposite Kinetics Global and Salient Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Salient Alternative 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 Salient Alternative will offset losses from the drop in Salient Alternative's long position.| Kinetics Global vs. Bbh Intermediate Municipal | Kinetics Global vs. Angel Oak Ultrashort | Kinetics Global vs. Nebraska Municipal Fund | Kinetics Global vs. Blrc Sgy Mnp |
| Salient Alternative vs. Gabelli Gold Fund | Salient Alternative vs. Precious Metals And | Salient Alternative vs. Gamco Global Gold | Salient Alternative vs. Great West Goldman Sachs |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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