Correlation Between Kinetics Global and Vela Income
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Vela Income 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 Vela Income 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 Vela Income Opportunities, you can compare the effects of market volatilities on Kinetics Global and Vela Income 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 Vela Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Vela Income.
Diversification Opportunities for Kinetics Global and Vela Income
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Vela is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Vela Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vela Income Opportunities 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 Vela Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vela Income Opportunities has no effect on the direction of Kinetics Global i.e., Kinetics Global and Vela Income go up and down completely randomly.
Pair Corralation between Kinetics Global and Vela Income
Assuming the 90 days horizon Kinetics Global Fund is expected to generate 2.18 times more return on investment than Vela Income. However, Kinetics Global is 2.18 times more volatile than Vela Income Opportunities. It trades about 0.11 of its potential returns per unit of risk. Vela Income Opportunities is currently generating about 0.05 per unit of risk. If you would invest 789.00 in Kinetics Global Fund on September 12, 2024 and sell it today you would earn a total of 755.00 from holding Kinetics Global Fund or generate 95.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kinetics Global Fund vs. Vela Income Opportunities
Performance |
| Timeline |
| Kinetics Global |
| Vela Income Opportunities |
Kinetics Global and Vela Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Vela Income
The main advantage of trading using opposite Kinetics Global and Vela Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Vela Income 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 Vela Income will offset losses from the drop in Vela Income'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 |
| Vela Income vs. Siit Global Managed | Vela Income vs. Kinetics Global Fund | Vela Income vs. Investec Global Franchise | Vela Income 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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