Correlation Between Kinetics Internet and Cullen International
Can any of the company-specific risk be diversified away by investing in both Kinetics Internet and Cullen International 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 Internet and Cullen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Internet Fund and Cullen International High, you can compare the effects of market volatilities on Kinetics Internet and Cullen International 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 Internet with a short position of Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Internet and Cullen International.
Diversification Opportunities for Kinetics Internet and Cullen International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kinetics and Cullen is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Internet Fund and Cullen International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen International High and Kinetics Internet 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 Internet Fund are associated (or correlated) with Cullen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen International High has no effect on the direction of Kinetics Internet i.e., Kinetics Internet and Cullen International go up and down completely randomly.
Pair Corralation between Kinetics Internet and Cullen International
Assuming the 90 days horizon Kinetics Internet Fund is expected to generate 2.62 times more return on investment than Cullen International. However, Kinetics Internet is 2.62 times more volatile than Cullen International High. It trades about 0.08 of its potential returns per unit of risk. Cullen International High is currently generating about 0.02 per unit of risk. If you would invest 5,797 in Kinetics Internet Fund on November 28, 2024 and sell it today you would earn a total of 1,646 from holding Kinetics Internet Fund or generate 28.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Internet Fund vs. Cullen International High
Performance |
| Timeline |
| Kinetics Internet |
| Cullen International High |
Kinetics Internet and Cullen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Internet and Cullen International
The main advantage of trading using opposite Kinetics Internet and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Internet position performs unexpectedly, Cullen International 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 Cullen International will offset losses from the drop in Cullen International's long position.| Kinetics Internet vs. Putnam Global Health | Kinetics Internet vs. Alphacentric Lifesci Healthcare | Kinetics Internet vs. Health Care Ultrasector | Kinetics Internet vs. Live Oak Health |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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