Correlation Between Kinetics Paradigm and Third Avenue
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Third Avenue 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 Third Avenue 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 Third Avenue Value, you can compare the effects of market volatilities on Kinetics Paradigm and Third Avenue 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 Third Avenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Third Avenue.
Diversification Opportunities for Kinetics Paradigm and Third Avenue
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Third is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Third Avenue Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Avenue Value 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 Third Avenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Avenue Value has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Third Avenue go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Third Avenue
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 2.17 times more return on investment than Third Avenue. However, Kinetics Paradigm is 2.17 times more volatile than Third Avenue Value. It trades about 0.04 of its potential returns per unit of risk. Third Avenue Value is currently generating about 0.05 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Third Avenue Value
Performance |
| Timeline |
| Kinetics Paradigm |
| Third Avenue Value |
Kinetics Paradigm and Third Avenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Third Avenue
The main advantage of trading using opposite Kinetics Paradigm and Third Avenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Third Avenue 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 Third Avenue will offset losses from the drop in Third Avenue'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 |
| Third Avenue vs. Inflation Adjusted Bond Fund | Third Avenue vs. Credit Suisse Multialternative | Third Avenue vs. Lord Abbett Inflation | Third Avenue vs. Credit Suisse Multialternative |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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