Correlation Between Kinetics Global and Westwood Short
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Westwood Short 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 Westwood Short 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 Westwood Short Duration, you can compare the effects of market volatilities on Kinetics Global and Westwood Short 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 Westwood Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Westwood Short.
Diversification Opportunities for Kinetics Global and Westwood Short
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Westwood is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Westwood Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Short Duration 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 Westwood Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Short Duration has no effect on the direction of Kinetics Global i.e., Kinetics Global and Westwood Short go up and down completely randomly.
Pair Corralation between Kinetics Global and Westwood Short
Assuming the 90 days horizon Kinetics Global Fund is expected to generate 3.75 times more return on investment than Westwood Short. However, Kinetics Global is 3.75 times more volatile than Westwood Short Duration. It trades about 0.11 of its potential returns per unit of risk. Westwood Short Duration is currently generating about 0.09 per unit of risk. If you would invest 776.00 in Kinetics Global Fund on October 7, 2024 and sell it today you would earn a total of 745.00 from holding Kinetics Global Fund or generate 96.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Global Fund vs. Westwood Short Duration
Performance |
| Timeline |
| Kinetics Global |
| Westwood Short Duration |
Kinetics Global and Westwood Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Westwood Short
The main advantage of trading using opposite Kinetics Global and Westwood Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Westwood Short 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 Westwood Short will offset losses from the drop in Westwood Short's long position.| Kinetics Global vs. Mid Cap 15x Strategy | Kinetics Global vs. Realestaterealreturn Strategy Fund | Kinetics Global vs. Eagle Mlp Strategy | Kinetics Global vs. Wcm Focused Emerging |
| Westwood Short vs. Fidelity Asset Manager | Westwood Short vs. Fidelity Asset Manager | Westwood Short vs. Fidelity Asset Manager | Westwood Short vs. Fidelity Asset Manager |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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