Correlation Between Kinetics Market and Touchstone Sands
Can any of the company-specific risk be diversified away by investing in both Kinetics Market and Touchstone Sands 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 Touchstone Sands 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 Touchstone Sands Capital, you can compare the effects of market volatilities on Kinetics Market and Touchstone Sands 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 Touchstone Sands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Touchstone Sands.
Diversification Opportunities for Kinetics Market and Touchstone Sands
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Touchstone is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Touchstone Sands Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Sands Capital 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 Touchstone Sands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Sands Capital has no effect on the direction of Kinetics Market i.e., Kinetics Market and Touchstone Sands go up and down completely randomly.
Pair Corralation between Kinetics Market and Touchstone Sands
Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.97 times more return on investment than Touchstone Sands. However, Kinetics Market is 1.97 times more volatile than Touchstone Sands Capital. It trades about 0.2 of its potential returns per unit of risk. Touchstone Sands Capital is currently generating about 0.04 per unit of risk. If you would invest 3,795 in Kinetics Market Opportunities on September 4, 2024 and sell it today you would earn a total of 4,797 from holding Kinetics Market Opportunities or generate 126.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Market Opportunities vs. Touchstone Sands Capital
Performance |
| Timeline |
| Kinetics Market Oppo |
| Touchstone Sands Capital |
Kinetics Market and Touchstone Sands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Market and Touchstone Sands
The main advantage of trading using opposite Kinetics Market and Touchstone Sands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market position performs unexpectedly, Touchstone Sands 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 Touchstone Sands will offset losses from the drop in Touchstone Sands' 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 |
| Touchstone Sands vs. Touchstone Small Cap | Touchstone Sands vs. Mid Cap Growth | Touchstone Sands vs. Mid Cap Growth | Touchstone Sands vs. Mid Cap Growth |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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