Correlation Between Kinetics Paradigm and First Eagle
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and First Eagle 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 First Eagle 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 First Eagle Gold, you can compare the effects of market volatilities on Kinetics Paradigm and First Eagle 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 First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and First Eagle.
Diversification Opportunities for Kinetics Paradigm and First Eagle
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and First is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and First Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Gold 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Gold has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and First Eagle go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and First Eagle
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.25 times more return on investment than First Eagle. However, Kinetics Paradigm is 1.25 times more volatile than First Eagle Gold. It trades about 0.07 of its potential returns per unit of risk. First Eagle Gold is currently generating about 0.03 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 | 30.91% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. First Eagle Gold
Performance |
| Timeline |
| Kinetics Paradigm |
| First Eagle Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinetics Paradigm and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and First Eagle
The main advantage of trading using opposite Kinetics Paradigm and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.The idea behind Kinetics Paradigm Fund and First Eagle Gold 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.
| First Eagle vs. Jhancock Diversified Macro | First Eagle vs. Legg Mason Bw | First Eagle vs. T Rowe Price | First Eagle vs. Fuller Thaler Behavioral |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |