Correlation Between Kinetics Paradigm and Maine Municipal
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Maine 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 Maine 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 Maine Municipal Fund, you can compare the effects of market volatilities on Kinetics Paradigm and Maine 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 Maine Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Maine Municipal.
Diversification Opportunities for Kinetics Paradigm and Maine Municipal
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Maine is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Maine Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maine Municipal 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 Maine Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maine Municipal has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Maine Municipal go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Maine Municipal
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 7.35 times more return on investment than Maine Municipal. However, Kinetics Paradigm is 7.35 times more volatile than Maine Municipal Fund. It trades about 0.5 of its potential returns per unit of risk. Maine Municipal Fund is currently generating about -0.01 per unit of risk. If you would invest 10,650 in Kinetics Paradigm Fund on August 29, 2024 and sell it today you would earn a total of 6,759 from holding Kinetics Paradigm Fund or generate 63.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Maine Municipal Fund
Performance |
| Timeline |
| Kinetics Paradigm |
| Maine Municipal |
Kinetics Paradigm and Maine Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Maine Municipal
The main advantage of trading using opposite Kinetics Paradigm and Maine Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Maine 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 Maine Municipal will offset losses from the drop in Maine Municipal's long position.| Kinetics Paradigm vs. T Rowe Price | Kinetics Paradigm vs. T Rowe Price | Kinetics Paradigm vs. T Rowe Price | Kinetics Paradigm vs. Midcap Fund Class |
| Maine Municipal vs. Ultra Short Fixed Income | Maine Municipal vs. Gmo Global Equity | Maine Municipal vs. Cutler Equity | Maine Municipal vs. The Hartford Equity |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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