Correlation Between Kinetics Paradigm and 1290 Smartbeta
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and 1290 Smartbeta 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 1290 Smartbeta 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 1290 Smartbeta Equity, you can compare the effects of market volatilities on Kinetics Paradigm and 1290 Smartbeta 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 1290 Smartbeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and 1290 Smartbeta.
Diversification Opportunities for Kinetics Paradigm and 1290 Smartbeta
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and 1290 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and 1290 Smartbeta Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Smartbeta Equity 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 1290 Smartbeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Smartbeta Equity has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and 1290 Smartbeta go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and 1290 Smartbeta
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.27 times more return on investment than 1290 Smartbeta. However, Kinetics Paradigm is 3.27 times more volatile than 1290 Smartbeta Equity. It trades about 0.16 of its potential returns per unit of risk. 1290 Smartbeta Equity is currently generating about 0.17 per unit of risk. If you would invest 6,853 in Kinetics Paradigm Fund on September 1, 2024 and sell it today you would earn a total of 8,633 from holding Kinetics Paradigm Fund or generate 125.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. 1290 Smartbeta Equity
Performance |
| Timeline |
| Kinetics Paradigm |
| 1290 Smartbeta Equity |
Kinetics Paradigm and 1290 Smartbeta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and 1290 Smartbeta
The main advantage of trading using opposite Kinetics Paradigm and 1290 Smartbeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, 1290 Smartbeta 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 1290 Smartbeta will offset losses from the drop in 1290 Smartbeta's long position.| Kinetics Paradigm vs. Kinetics Global Fund | Kinetics Paradigm vs. Kinetics Global Fund | Kinetics Paradigm vs. Kinetics Paradigm Fund | Kinetics Paradigm vs. Kinetics Internet Fund |
| 1290 Smartbeta vs. 1290 Funds | 1290 Smartbeta vs. 1290 Essex Small | 1290 Smartbeta vs. 1290 Funds | 1290 Smartbeta vs. 1290 Smartbeta Equity |
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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