Correlation Between Kinetics Paradigm and Clarkston Founders
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Clarkston Founders 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 Clarkston Founders 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 Clarkston Founders Fund, you can compare the effects of market volatilities on Kinetics Paradigm and Clarkston Founders 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 Clarkston Founders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Clarkston Founders.
Diversification Opportunities for Kinetics Paradigm and Clarkston Founders
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Clarkston is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Clarkston Founders Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarkston Founders 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 Clarkston Founders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarkston Founders has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Clarkston Founders go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Clarkston Founders
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 2.21 times more return on investment than Clarkston Founders. However, Kinetics Paradigm is 2.21 times more volatile than Clarkston Founders Fund. It trades about 0.07 of its potential returns per unit of risk. Clarkston Founders Fund is currently generating about 0.04 per unit of risk. If you would invest 9,677 in Kinetics Paradigm Fund on August 26, 2024 and sell it today you would earn a total of 6,927 from holding Kinetics Paradigm Fund or generate 71.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Clarkston Founders Fund
Performance |
| Timeline |
| Kinetics Paradigm |
| Clarkston Founders |
Kinetics Paradigm and Clarkston Founders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Clarkston Founders
The main advantage of trading using opposite Kinetics Paradigm and Clarkston Founders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Clarkston Founders 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 Clarkston Founders will offset losses from the drop in Clarkston Founders' long position.| Kinetics Paradigm vs. Allianzgi Health Sciences | Kinetics Paradigm vs. Health Biotchnology Portfolio | Kinetics Paradigm vs. Allianzgi Health Sciences | Kinetics Paradigm vs. Alphacentric Lifesci Healthcare |
| Clarkston Founders vs. Clarkston Founders | Clarkston Founders vs. Clarkston Partners Fund | Clarkston Founders vs. Clarkston Partners Fund | Clarkston Founders vs. Vanguard Target Retirement |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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