Correlation Between Kinetics Market and Baron Small
Can any of the company-specific risk be diversified away by investing in both Kinetics Market and Baron 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 Market and Baron Small 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 Baron Small Cap, you can compare the effects of market volatilities on Kinetics Market and Baron 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 Market with a short position of Baron Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Baron Small.
Diversification Opportunities for Kinetics Market and Baron Small
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Baron is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Baron Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Small Cap 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 Baron Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Small Cap has no effect on the direction of Kinetics Market i.e., Kinetics Market and Baron Small go up and down completely randomly.
Pair Corralation between Kinetics Market and Baron Small
Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.32 times more return on investment than Baron Small. However, Kinetics Market is 1.32 times more volatile than Baron Small Cap. It trades about 0.1 of its potential returns per unit of risk. Baron Small Cap is currently generating about 0.07 per unit of risk. If you would invest 4,561 in Kinetics Market Opportunities on September 3, 2024 and sell it today you would earn a total of 4,408 from holding Kinetics Market Opportunities or generate 96.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Market Opportunities vs. Baron Small Cap
Performance |
| Timeline |
| Kinetics Market Oppo |
| Baron Small Cap |
Kinetics Market and Baron Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Market and Baron Small
The main advantage of trading using opposite Kinetics Market and Baron Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market position performs unexpectedly, Baron 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 Baron Small will offset losses from the drop in Baron Small's long position.| Kinetics Market vs. Angel Oak Multi Strategy | Kinetics Market vs. Commodities Strategy Fund | Kinetics Market vs. T Rowe Price | Kinetics Market vs. Templeton Emerging Markets |
| Baron Small vs. Calamos Market Neutral | Baron Small vs. Kinetics Market Opportunities | Baron Small vs. Templeton Developing Markets | Baron Small vs. Mondrian Emerging Markets |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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