Correlation Between Kinetics Market and Columbia Select
Can any of the company-specific risk be diversified away by investing in both Kinetics Market and Columbia Select 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 Columbia Select 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 Columbia Select Smaller Cap, you can compare the effects of market volatilities on Kinetics Market and Columbia Select 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 Columbia Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Columbia Select.
Diversification Opportunities for Kinetics Market and Columbia Select
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and Columbia is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Columbia Select Smaller Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Select Smaller 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 Columbia Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Select Smaller has no effect on the direction of Kinetics Market i.e., Kinetics Market and Columbia Select go up and down completely randomly.
Pair Corralation between Kinetics Market and Columbia Select
Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 2.1 times more return on investment than Columbia Select. However, Kinetics Market is 2.1 times more volatile than Columbia Select Smaller Cap. It trades about 0.32 of its potential returns per unit of risk. Columbia Select Smaller Cap is currently generating about 0.32 per unit of risk. If you would invest 6,991 in Kinetics Market Opportunities on September 4, 2024 and sell it today you would earn a total of 1,601 from holding Kinetics Market Opportunities or generate 22.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Market Opportunities vs. Columbia Select Smaller Cap
Performance |
| Timeline |
| Kinetics Market Oppo |
| Columbia Select Smaller |
Kinetics Market and Columbia Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Market and Columbia Select
The main advantage of trading using opposite Kinetics Market and Columbia Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market position performs unexpectedly, Columbia Select 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 Columbia Select will offset losses from the drop in Columbia Select'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 |
| Columbia Select vs. Columbia Porate Income | Columbia Select vs. Columbia Ultra Short | Columbia Select vs. Columbia Ultra Short | Columbia Select vs. Columbia Treasury Index |
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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