Correlation Between Kinetics Market and New Alternatives
Can any of the company-specific risk be diversified away by investing in both Kinetics Market and New Alternatives 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 New Alternatives 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 New Alternatives Fund, you can compare the effects of market volatilities on Kinetics Market and New Alternatives 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 New Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and New Alternatives.
Diversification Opportunities for Kinetics Market and New Alternatives
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and New is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and New Alternatives Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Alternatives 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 New Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Alternatives has no effect on the direction of Kinetics Market i.e., Kinetics Market and New Alternatives go up and down completely randomly.
Pair Corralation between Kinetics Market and New Alternatives
Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.41 times more return on investment than New Alternatives. However, Kinetics Market is 1.41 times more volatile than New Alternatives Fund. It trades about 0.1 of its potential returns per unit of risk. New Alternatives Fund is currently generating about -0.01 per unit of risk. If you would invest 4,526 in Kinetics Market Opportunities on August 26, 2024 and sell it today you would earn a total of 4,909 from holding Kinetics Market Opportunities or generate 108.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Market Opportunities vs. New Alternatives Fund
Performance |
| Timeline |
| Kinetics Market Oppo |
| New Alternatives |
Kinetics Market and New Alternatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Market and New Alternatives
The main advantage of trading using opposite Kinetics Market and New Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market position performs unexpectedly, New Alternatives 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 New Alternatives will offset losses from the drop in New Alternatives' long position.| Kinetics Market vs. Touchstone Ultra Short | Kinetics Market vs. Vanguard Institutional Short Term | Kinetics Market vs. Astor Longshort Fund | Kinetics Market vs. Angel Oak Ultrashort |
| New Alternatives vs. New Alternatives Fund | New Alternatives vs. Alternative Credit Income | New Alternatives vs. Vaughan Nelson Select | New Alternatives vs. Industrials Portfolio Industrials |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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