Correlation Between Kinetics Market and New Economy
Can any of the company-specific risk be diversified away by investing in both Kinetics Market and New Economy 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 Economy 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 Economy Fund, you can compare the effects of market volatilities on Kinetics Market and New Economy 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 Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and New Economy.
Diversification Opportunities for Kinetics Market and New Economy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and New is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund 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 Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Kinetics Market i.e., Kinetics Market and New Economy go up and down completely randomly.
Pair Corralation between Kinetics Market and New Economy
Assuming the 90 days horizon Kinetics Market Opportunities is expected to under-perform the New Economy. In addition to that, Kinetics Market is 5.32 times more volatile than New Economy Fund. It trades about -0.04 of its total potential returns per unit of risk. New Economy Fund is currently generating about 0.4 per unit of volatility. If you would invest 6,668 in New Economy Fund on September 16, 2024 and sell it today you would earn a total of 367.00 from holding New Economy Fund or generate 5.5% 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. New Economy Fund
Performance |
| Timeline |
| Kinetics Market Oppo |
| New Economy Fund |
Kinetics Market and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Market and New Economy
The main advantage of trading using opposite Kinetics Market and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market position performs unexpectedly, New Economy 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 Economy will offset losses from the drop in New Economy's long position.| Kinetics Market vs. Ep Emerging Markets | Kinetics Market vs. Dws Emerging Markets | Kinetics Market vs. Pace International Emerging | Kinetics Market vs. Pnc Emerging Markets |
| New Economy vs. Kinetics Market Opportunities | New Economy vs. T Rowe Price | New Economy vs. Locorr Market Trend | New Economy vs. Investec 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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