Correlation Between Kinetics Internet and Polen Small
Can any of the company-specific risk be diversified away by investing in both Kinetics Internet and Polen Small 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 Polen Small 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 Polen Small, you can compare the effects of market volatilities on Kinetics Internet and Polen Small 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 Polen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Internet and Polen Small.
Diversification Opportunities for Kinetics Internet and Polen Small
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Polen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Internet Fund and Polen Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Small 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 Polen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Small has no effect on the direction of Kinetics Internet i.e., Kinetics Internet and Polen Small go up and down completely randomly.
Pair Corralation between Kinetics Internet and Polen Small
Assuming the 90 days horizon Kinetics Internet Fund is expected to under-perform the Polen Small. In addition to that, Kinetics Internet is 1.17 times more volatile than Polen Small. It trades about -0.25 of its total potential returns per unit of risk. Polen Small is currently generating about -0.22 per unit of volatility. If you would invest 1,532 in Polen Small on November 28, 2024 and sell it today you would lose (94.00) from holding Polen Small or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Internet Fund vs. Polen Small
Performance |
| Timeline |
| Kinetics Internet |
| Polen Small |
Kinetics Internet and Polen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Internet and Polen Small
The main advantage of trading using opposite Kinetics Internet and Polen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Internet position performs unexpectedly, Polen Small 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 Polen Small will offset losses from the drop in Polen Small'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 |
| Polen Small vs. Inverse Government Long | Polen Small vs. Blackrock Government Bond | Polen Small vs. John Hancock Government | Polen Small vs. Us Government Securities |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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