Correlation Between Kinetics Paradigm and City National
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and City National 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 City National 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 City National Rochdale, you can compare the effects of market volatilities on Kinetics Paradigm and City National 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 City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and City National.
Diversification Opportunities for Kinetics Paradigm and City National
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and City is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale 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 City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and City National go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and City National
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.89 times more return on investment than City National. However, Kinetics Paradigm is 3.89 times more volatile than City National Rochdale. It trades about 0.44 of its potential returns per unit of risk. City National Rochdale is currently generating about 0.21 per unit of risk. If you would invest 13,148 in Kinetics Paradigm Fund on August 31, 2024 and sell it today you would earn a total of 4,535 from holding Kinetics Paradigm Fund or generate 34.49% 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. City National Rochdale
Performance |
| Timeline |
| Kinetics Paradigm |
| City National Rochdale |
Kinetics Paradigm and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and City National
The main advantage of trading using opposite Kinetics Paradigm and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Kinetics Paradigm vs. Goldman Sachs Technology | Kinetics Paradigm vs. Dreyfus Technology Growth | Kinetics Paradigm vs. Science Technology Fund | Kinetics Paradigm vs. Allianzgi Technology Fund |
| City National vs. Balanced Fund Retail | City National vs. Scharf Fund Retail | City National vs. Ultra Short Fixed Income | City National vs. Jpmorgan Equity Income |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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