Correlation Between Kinetics Paradigm and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Mlp, you can compare the effects of market volatilities on Kinetics Paradigm and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Goldman Sachs.
Diversification Opportunities for Kinetics Paradigm and Goldman Sachs
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Goldman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Goldman Sachs Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Mlp 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Mlp has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Goldman Sachs go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Goldman Sachs
Assuming the 90 days horizon Kinetics Paradigm is expected to generate 1.36 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Kinetics Paradigm Fund is 1.03 times less risky than Goldman Sachs. It trades about 0.07 of its potential returns per unit of risk. Goldman Sachs Mlp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,257 in Goldman Sachs Mlp on September 4, 2024 and sell it today you would earn a total of 326.00 from holding Goldman Sachs Mlp or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 28.54% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Goldman Sachs Mlp
Performance |
| Timeline |
| Kinetics Paradigm |
| Goldman Sachs Mlp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinetics Paradigm and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Goldman Sachs
The main advantage of trading using opposite Kinetics Paradigm and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Kinetics Paradigm vs. Vanguard California Long Term | Kinetics Paradigm vs. Franklin High Yield | Kinetics Paradigm vs. Federated Pennsylvania Municipal | Kinetics Paradigm vs. Victory High Income |
| Goldman Sachs vs. Blackrock Floating Rate | Goldman Sachs vs. Pioneer Floating Rate | Goldman Sachs vs. Eaton Vance Senior | Goldman Sachs vs. Eaton Vance Senior |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |