Correlation Between Kinetics Paradigm and Future Scholar
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Future Scholar 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 Future Scholar 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 Future Scholar 529, you can compare the effects of market volatilities on Kinetics Paradigm and Future Scholar 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 Future Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Future Scholar.
Diversification Opportunities for Kinetics Paradigm and Future Scholar
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kinetics and Future is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Future Scholar 529 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Scholar 529 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 Future Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Scholar 529 has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Future Scholar go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Future Scholar
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 8.92 times more return on investment than Future Scholar. However, Kinetics Paradigm is 8.92 times more volatile than Future Scholar 529. It trades about 0.07 of its potential returns per unit of risk. Future Scholar 529 is currently generating about 0.08 per unit of risk. If you would invest 9,759 in Kinetics Paradigm Fund on September 3, 2024 and sell it today you would earn a total of 7,606 from holding Kinetics Paradigm Fund or generate 77.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Future Scholar 529
Performance |
| Timeline |
| Kinetics Paradigm |
| Future Scholar 529 |
Kinetics Paradigm and Future Scholar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Future Scholar
The main advantage of trading using opposite Kinetics Paradigm and Future Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Future Scholar 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 Future Scholar will offset losses from the drop in Future Scholar's long position.The idea behind Kinetics Paradigm Fund and Future Scholar 529 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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