Correlation Between Kinetics Paradigm and Ab Small
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Ab Small 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 Ab Small 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 Ab Small Cap, you can compare the effects of market volatilities on Kinetics Paradigm and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Ab Small.
Diversification Opportunities for Kinetics Paradigm and Ab Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and QUAIX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Ab Small go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Ab Small
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.51 times more return on investment than Ab Small. However, Kinetics Paradigm is 1.51 times more volatile than Ab Small Cap. It trades about 0.19 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.11 per unit of risk. If you would invest 6,402 in Kinetics Paradigm Fund on September 2, 2024 and sell it today you would earn a total of 9,084 from holding Kinetics Paradigm Fund or generate 141.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Ab Small Cap
Performance |
| Timeline |
| Kinetics Paradigm |
| Ab Small Cap |
Kinetics Paradigm and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Ab Small
The main advantage of trading using opposite Kinetics Paradigm and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small's long position.| Kinetics Paradigm vs. Fidelity Advisor Diversified | Kinetics Paradigm vs. Aqr Diversified Arbitrage | Kinetics Paradigm vs. Tax Managed Mid Small | Kinetics Paradigm vs. Delaware Limited Term Diversified |
| Ab Small vs. Dreyfus Institutional Reserves | Ab Small vs. Ashmore Emerging Markets | Ab Small vs. Meeder Funds | Ab Small vs. Jpmorgan Trust I |
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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