Correlation Between Kinetics Internet and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Kinetics Internet and Nuveen Preferred 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 Nuveen Preferred 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 Nuveen Preferred Income, you can compare the effects of market volatilities on Kinetics Internet and Nuveen Preferred 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 Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Internet and Nuveen Preferred.
Diversification Opportunities for Kinetics Internet and Nuveen Preferred
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Nuveen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Internet Fund and Nuveen Preferred Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred Income 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 Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred Income has no effect on the direction of Kinetics Internet i.e., Kinetics Internet and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Kinetics Internet and Nuveen Preferred
Assuming the 90 days horizon Kinetics Internet Fund is expected to generate 1.82 times more return on investment than Nuveen Preferred. However, Kinetics Internet is 1.82 times more volatile than Nuveen Preferred Income. It trades about 0.12 of its potential returns per unit of risk. Nuveen Preferred Income is currently generating about 0.06 per unit of risk. If you would invest 3,562 in Kinetics Internet Fund on September 3, 2024 and sell it today you would earn a total of 5,012 from holding Kinetics Internet Fund or generate 140.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Internet Fund vs. Nuveen Preferred Income
Performance |
| Timeline |
| Kinetics Internet |
| Nuveen Preferred Income |
Kinetics Internet and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Internet and Nuveen Preferred
The main advantage of trading using opposite Kinetics Internet and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Internet position performs unexpectedly, Nuveen Preferred 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 Nuveen Preferred will offset losses from the drop in Nuveen Preferred's long position.| Kinetics Internet vs. Rationalpier 88 Convertible | Kinetics Internet vs. Fidelity Sai Convertible | Kinetics Internet vs. Advent Claymore Convertible | Kinetics Internet vs. Rationalpier 88 Convertible |
| Nuveen Preferred vs. Blackrock Floating Rate | Nuveen Preferred vs. Flaherty Crumrine Preferred | Nuveen Preferred vs. Western Asset Emerging | Nuveen Preferred vs. Doubleline Income Solutions |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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