Correlation Between Kinetics Paradigm and Western Asset
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Western Asset 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 Western Asset 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 Western Asset E, you can compare the effects of market volatilities on Kinetics Paradigm and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Western Asset.
Diversification Opportunities for Kinetics Paradigm and Western Asset
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kinetics and Western is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Western Asset go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Western Asset
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 8.14 times more return on investment than Western Asset. However, Kinetics Paradigm is 8.14 times more volatile than Western Asset E. It trades about 0.44 of its potential returns per unit of risk. Western Asset E is currently generating about 0.04 per unit of risk. If you would invest 13,200 in Kinetics Paradigm Fund on September 1, 2024 and sell it today you would earn a total of 4,483 from holding Kinetics Paradigm Fund or generate 33.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Western Asset E
Performance |
| Timeline |
| Kinetics Paradigm |
| Western Asset E |
Kinetics Paradigm and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Western Asset
The main advantage of trading using opposite Kinetics Paradigm and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Nationwide Inflation Protected Securities | Western Asset vs. Western Asset Inflation | Western Asset vs. Aqr Managed Futures | Western Asset vs. Aqr Managed Futures |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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