Correlation Between Kinetics Paradigm and Fidelity Municipal
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Fidelity Municipal 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 Fidelity Municipal 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 Fidelity Municipal Income, you can compare the effects of market volatilities on Kinetics Paradigm and Fidelity Municipal 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 Fidelity Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Fidelity Municipal.
Diversification Opportunities for Kinetics Paradigm and Fidelity Municipal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Fidelity is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Fidelity Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Municipal Income 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 Fidelity Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Municipal Income has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Fidelity Municipal go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Fidelity Municipal
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 57.08 times more return on investment than Fidelity Municipal. However, Kinetics Paradigm is 57.08 times more volatile than Fidelity Municipal Income. It trades about 0.68 of its potential returns per unit of risk. Fidelity Municipal Income is currently generating about 0.3 per unit of risk. If you would invest 12,597 in Kinetics Paradigm Fund on August 28, 2024 and sell it today you would earn a total of 5,832 from holding Kinetics Paradigm Fund or generate 46.3% 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. Fidelity Municipal Income
Performance |
| Timeline |
| Kinetics Paradigm |
| Fidelity Municipal Income |
Kinetics Paradigm and Fidelity Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Fidelity Municipal
The main advantage of trading using opposite Kinetics Paradigm and Fidelity Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Fidelity Municipal 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 Fidelity Municipal will offset losses from the drop in Fidelity Municipal's long position.| Kinetics Paradigm vs. Pioneer Diversified High | Kinetics Paradigm vs. Huber Capital Diversified | Kinetics Paradigm vs. Fidelity Advisor Diversified | Kinetics Paradigm vs. Calvert Conservative Allocation |
| Fidelity Municipal vs. Fidelity Freedom 2015 | Fidelity Municipal vs. Fidelity Puritan Fund | Fidelity Municipal vs. Fidelity Puritan Fund | Fidelity Municipal vs. Fidelity Pennsylvania Municipal |
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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