Correlation Between Kinetics Paradigm and Aberdeen Income
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Aberdeen Income 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 Aberdeen Income 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 Aberdeen Income Credit, you can compare the effects of market volatilities on Kinetics Paradigm and Aberdeen Income 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 Aberdeen Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Aberdeen Income.
Diversification Opportunities for Kinetics Paradigm and Aberdeen Income
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Aberdeen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Aberdeen Income Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Income Credit 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 Aberdeen Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Income Credit has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Aberdeen Income go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Aberdeen Income
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.94 times more return on investment than Aberdeen Income. However, Kinetics Paradigm is 3.94 times more volatile than Aberdeen Income Credit. It trades about 0.4 of its potential returns per unit of risk. Aberdeen Income Credit is currently generating about 0.14 per unit of risk. If you would invest 8,793 in Kinetics Paradigm Fund on September 3, 2024 and sell it today you would earn a total of 6,693 from holding Kinetics Paradigm Fund or generate 76.12% 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. Aberdeen Income Credit
Performance |
| Timeline |
| Kinetics Paradigm |
| Aberdeen Income Credit |
Kinetics Paradigm and Aberdeen Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Aberdeen Income
The main advantage of trading using opposite Kinetics Paradigm and Aberdeen Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Aberdeen Income 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 Aberdeen Income will offset losses from the drop in Aberdeen Income's long position.| Kinetics Paradigm vs. Rbc Short Duration | Kinetics Paradigm vs. Vanguard Institutional Short Term | Kinetics Paradigm vs. Touchstone Ultra Short | Kinetics Paradigm vs. Federated Short Term Income |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Correlations Find global opportunities by holding instruments from different markets |