Correlation Between Kinetics Market and Valic Company
Can any of the company-specific risk be diversified away by investing in both Kinetics Market and Valic Company 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 Valic Company 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 Valic Company I, you can compare the effects of market volatilities on Kinetics Market and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Valic Company.
Diversification Opportunities for Kinetics Market and Valic Company
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Valic is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Kinetics Market i.e., Kinetics Market and Valic Company go up and down completely randomly.
Pair Corralation between Kinetics Market and Valic Company
Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.8 times more return on investment than Valic Company. However, Kinetics Market is 1.8 times more volatile than Valic Company I. It trades about -0.04 of its potential returns per unit of risk. Valic Company I is currently generating about -0.26 per unit of risk. If you would invest 7,893 in Kinetics Market Opportunities on October 11, 2024 and sell it today you would lose (168.00) from holding Kinetics Market Opportunities or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Market Opportunities vs. Valic Company I
Performance |
| Timeline |
| Kinetics Market Oppo |
| Valic Company I |
Kinetics Market and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Market and Valic Company
The main advantage of trading using opposite Kinetics Market and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| Kinetics Market vs. Pnc Balanced Allocation | Kinetics Market vs. Qs Large Cap | Kinetics Market vs. Pace Large Growth | Kinetics Market vs. Touchstone Large Cap |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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