Correlation Between Kinetics Paradigm and Cardinal Small
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Cardinal Small 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 Paradigm and Cardinal Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Paradigm Fund and Cardinal Small Cap, you can compare the effects of market volatilities on Kinetics Paradigm and Cardinal Small 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 Paradigm with a short position of Cardinal Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Cardinal Small.
Diversification Opportunities for Kinetics Paradigm and Cardinal Small
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinetics and Cardinal is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Cardinal Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Small Cap and Kinetics Paradigm 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 Paradigm Fund are associated (or correlated) with Cardinal Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Small Cap has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Cardinal Small go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Cardinal Small
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.7 times more return on investment than Cardinal Small. However, Kinetics Paradigm is 1.7 times more volatile than Cardinal Small Cap. It trades about 0.06 of its potential returns per unit of risk. Cardinal Small Cap is currently generating about 0.03 per unit of risk. If you would invest 9,516 in Kinetics Paradigm Fund on September 13, 2024 and sell it today you would earn a total of 5,246 from holding Kinetics Paradigm Fund or generate 55.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Cardinal Small Cap
Performance |
| Timeline |
| Kinetics Paradigm |
| Cardinal Small Cap |
Kinetics Paradigm and Cardinal Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Cardinal Small
The main advantage of trading using opposite Kinetics Paradigm and Cardinal Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Cardinal Small 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 Cardinal Small will offset losses from the drop in Cardinal Small's long position.| Kinetics Paradigm vs. Kinetics Global Fund | Kinetics Paradigm vs. Kinetics Global Fund | Kinetics Paradigm vs. Kinetics Paradigm Fund | Kinetics Paradigm vs. Kinetics Internet Fund |
| Cardinal Small vs. New Economy Fund | Cardinal Small vs. Vanguard Growth Index | Cardinal Small vs. Fidelity Trend Fund | Cardinal Small vs. Kinetics Paradigm Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |