Correlation Between Kinetics Market and Copper
Can any of the company-specific risk be diversified away by investing in both Kinetics Market and Copper 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 Copper 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 Copper, you can compare the effects of market volatilities on Kinetics Market and Copper 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 Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Copper.
Diversification Opportunities for Kinetics Market and Copper
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Copper is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 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 Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper has no effect on the direction of Kinetics Market i.e., Kinetics Market and Copper go up and down completely randomly.
Pair Corralation between Kinetics Market and Copper
Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.17 times more return on investment than Copper. However, Kinetics Market is 1.17 times more volatile than Copper. It trades about 0.1 of its potential returns per unit of risk. Copper is currently generating about 0.02 per unit of risk. If you would invest 4,658 in Kinetics Market Opportunities on August 29, 2024 and sell it today you would earn a total of 5,147 from holding Kinetics Market Opportunities or generate 110.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.45% |
| Values | Daily Returns |
Kinetics Market Opportunities vs. Copper
Performance |
| Timeline |
| Kinetics Market Oppo |
| Copper |
Kinetics Market and Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Market and Copper
The main advantage of trading using opposite Kinetics Market and Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Market position performs unexpectedly, Copper 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 Copper will offset losses from the drop in Copper's long position.| Kinetics Market vs. Kinetics Market Opportunities | Kinetics Market vs. Kinetics Small Cap | Kinetics Market vs. Kinetics Paradigm Fund | Kinetics Market vs. Alger Capital Appreciation |
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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