Correlation Between Kinetics Paradigm and Federated Premier
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Federated Premier 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 Federated Premier 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 Federated Premier Municipal, you can compare the effects of market volatilities on Kinetics Paradigm and Federated Premier 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 Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Federated Premier.
Diversification Opportunities for Kinetics Paradigm and Federated Premier
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinetics and Federated is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier 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 Federated Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Premier has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Federated Premier go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Federated Premier
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to under-perform the Federated Premier. In addition to that, Kinetics Paradigm is 3.5 times more volatile than Federated Premier Municipal. It trades about -0.06 of its total potential returns per unit of risk. Federated Premier Municipal is currently generating about 0.13 per unit of volatility. If you would invest 1,105 in Federated Premier Municipal on November 18, 2024 and sell it today you would earn a total of 17.00 from holding Federated Premier Municipal or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Federated Premier Municipal
Performance |
| Timeline |
| Kinetics Paradigm |
| Federated Premier |
Kinetics Paradigm and Federated Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Federated Premier
The main advantage of trading using opposite Kinetics Paradigm and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Federated Premier 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 Federated Premier will offset losses from the drop in Federated Premier's long position.| Kinetics Paradigm vs. Riverpark Short Term | Kinetics Paradigm vs. Barings Active Short | Kinetics Paradigm vs. Calvert Short Duration | Kinetics Paradigm vs. Transamerica Short Term Bond |
| Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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