Correlation Between Kinetics Paradigm and Payden Gnma
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Payden Gnma 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 Payden Gnma 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 Payden Gnma Fund, you can compare the effects of market volatilities on Kinetics Paradigm and Payden Gnma 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 Payden Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Payden Gnma.
Diversification Opportunities for Kinetics Paradigm and Payden Gnma
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinetics and Payden is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Payden Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Gnma Fund 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 Payden Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Gnma Fund has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Payden Gnma go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Payden Gnma
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 6.19 times more return on investment than Payden Gnma. However, Kinetics Paradigm is 6.19 times more volatile than Payden Gnma Fund. It trades about 0.04 of its potential returns per unit of risk. Payden Gnma Fund is currently generating about 0.13 per unit of risk. If you would invest 12,492 in Kinetics Paradigm Fund on November 27, 2024 and sell it today you would earn a total of 171.00 from holding Kinetics Paradigm Fund or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Payden Gnma Fund
Performance |
| Timeline |
| Kinetics Paradigm |
| Payden Gnma Fund |
Kinetics Paradigm and Payden Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Payden Gnma
The main advantage of trading using opposite Kinetics Paradigm and Payden Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Payden Gnma 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 Payden Gnma will offset losses from the drop in Payden Gnma's long position.| Kinetics Paradigm vs. Global Real Estate | Kinetics Paradigm vs. Prudential Real Estate | Kinetics Paradigm vs. Amg Managers Centersquare | Kinetics Paradigm vs. Neuberger Berman Real |
| Payden Gnma vs. Harbor Diversified International | Payden Gnma vs. Aqr Diversified Arbitrage | Payden Gnma vs. Fidelity Advisor Diversified | Payden Gnma vs. American Century Diversified |
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.
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