Correlation Between Kinetics Market and Cullen Small
Can any of the company-specific risk be diversified away by investing in both Kinetics Market and Cullen 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 Cullen 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 Cullen Small Cap, you can compare the effects of market volatilities on Kinetics Market and Cullen 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 Cullen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Cullen Small.
Diversification Opportunities for Kinetics Market and Cullen Small
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Cullen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Cullen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen 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 Cullen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Small Cap has no effect on the direction of Kinetics Market i.e., Kinetics Market and Cullen Small go up and down completely randomly.
Pair Corralation between Kinetics Market and Cullen Small
Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.5 times more return on investment than Cullen Small. However, Kinetics Market is 1.5 times more volatile than Cullen Small Cap. It trades about 0.47 of its potential returns per unit of risk. Cullen Small Cap is currently generating about 0.15 per unit of risk. If you would invest 6,763 in Kinetics Market Opportunities on August 30, 2024 and sell it today you would earn a total of 2,325 from holding Kinetics Market Opportunities or generate 34.38% 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. Cullen Small Cap
Performance |
| Timeline |
| Kinetics Market Oppo |
| Cullen Small Cap |
Kinetics Market and Cullen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Market and Cullen Small
The main advantage of trading using opposite Kinetics Market and Cullen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market position performs unexpectedly, Cullen 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 Cullen Small will offset losses from the drop in Cullen Small's long position.| Kinetics Market vs. Kinetics Global Fund | Kinetics Market vs. Kinetics Global Fund | Kinetics Market vs. Kinetics Paradigm Fund | Kinetics Market vs. Kinetics Internet Fund |
| Cullen Small vs. John Hancock Financial | Cullen Small vs. Icon Financial Fund | Cullen Small vs. Gabelli Global Financial | Cullen Small vs. Transamerica Financial Life |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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