Correlation Between Kinetics Market and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Kinetics Market and Loomis Sayles 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 Market and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Market Opportunities and Loomis Sayles Small, you can compare the effects of market volatilities on Kinetics Market and Loomis Sayles 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 Market with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Loomis Sayles.
Diversification Opportunities for Kinetics Market and Loomis Sayles
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Loomis is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Loomis Sayles Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Small and Kinetics Market 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 Market Opportunities are associated (or correlated) with Loomis Sayles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis Sayles Small has no effect on the direction of Kinetics Market i.e., Kinetics Market and Loomis Sayles go up and down completely randomly.
Pair Corralation between Kinetics Market and Loomis Sayles
Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.34 times more return on investment than Loomis Sayles. However, Kinetics Market is 1.34 times more volatile than Loomis Sayles Small. It trades about 0.1 of its potential returns per unit of risk. Loomis Sayles Small is currently generating about 0.04 per unit of risk. If you would invest 4,740 in Kinetics Market Opportunities on August 26, 2024 and sell it today you would earn a total of 5,243 from holding Kinetics Market Opportunities or generate 110.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Market Opportunities vs. Loomis Sayles Small
Performance |
| Timeline |
| Kinetics Market Oppo |
| Loomis Sayles Small |
Kinetics Market and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Market and Loomis Sayles
The main advantage of trading using opposite Kinetics Market and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market position performs unexpectedly, Loomis Sayles 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 Loomis Sayles will offset losses from the drop in Loomis Sayles' long position.| Kinetics Market vs. Pace High Yield | Kinetics Market vs. Victory High Income | Kinetics Market vs. Metropolitan West High | Kinetics Market vs. Lgm Risk Managed |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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