Correlation Between Kinetics Internet and Nicholas
Can any of the company-specific risk be diversified away by investing in both Kinetics Internet and Nicholas 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 Nicholas 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 Nicholas Ltd Edition, you can compare the effects of market volatilities on Kinetics Internet and Nicholas 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 Nicholas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Internet and Nicholas.
Diversification Opportunities for Kinetics Internet and Nicholas
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and Nicholas is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Internet Fund and Nicholas Ltd Edition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Edition 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 Nicholas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Edition has no effect on the direction of Kinetics Internet i.e., Kinetics Internet and Nicholas go up and down completely randomly.
Pair Corralation between Kinetics Internet and Nicholas
Assuming the 90 days horizon Kinetics Internet Fund is expected to generate 1.93 times more return on investment than Nicholas. However, Kinetics Internet is 1.93 times more volatile than Nicholas Ltd Edition. It trades about 0.16 of its potential returns per unit of risk. Nicholas Ltd Edition is currently generating about 0.13 per unit of risk. If you would invest 5,813 in Kinetics Internet Fund on September 1, 2024 and sell it today you would earn a total of 2,761 from holding Kinetics Internet Fund or generate 47.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Kinetics Internet Fund vs. Nicholas Ltd Edition
Performance |
| Timeline |
| Kinetics Internet |
| Nicholas Edition |
Kinetics Internet and Nicholas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Internet and Nicholas
The main advantage of trading using opposite Kinetics Internet and Nicholas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Internet position performs unexpectedly, Nicholas 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 Nicholas will offset losses from the drop in Nicholas' long position.| Kinetics Internet vs. Kinetics Global Fund | Kinetics Internet vs. Kinetics Global Fund | Kinetics Internet vs. Kinetics Paradigm Fund | Kinetics Internet vs. Kinetics Internet Fund |
| Nicholas vs. Dreyfus Government Cash | Nicholas vs. Prudential Government Income | Nicholas vs. Lord Abbett Government | Nicholas vs. Government Securities Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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