Correlation Between Kinetics Paradigm and Frost Kempner
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Frost Kempner 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 Frost Kempner 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 Frost Kempner Multi Cap, you can compare the effects of market volatilities on Kinetics Paradigm and Frost Kempner 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 Frost Kempner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Frost Kempner.
Diversification Opportunities for Kinetics Paradigm and Frost Kempner
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Frost is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Frost Kempner Multi Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Kempner Multi 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 Frost Kempner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Kempner Multi has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Frost Kempner go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Frost Kempner
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 4.88 times more return on investment than Frost Kempner. However, Kinetics Paradigm is 4.88 times more volatile than Frost Kempner Multi Cap. It trades about 0.28 of its potential returns per unit of risk. Frost Kempner Multi Cap is currently generating about 0.24 per unit of risk. If you would invest 14,426 in Kinetics Paradigm Fund on September 4, 2024 and sell it today you would earn a total of 3,231 from holding Kinetics Paradigm Fund or generate 22.4% 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. Frost Kempner Multi Cap
Performance |
| Timeline |
| Kinetics Paradigm |
| Frost Kempner Multi |
Kinetics Paradigm and Frost Kempner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Frost Kempner
The main advantage of trading using opposite Kinetics Paradigm and Frost Kempner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Frost Kempner 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 Frost Kempner will offset losses from the drop in Frost Kempner's long position.| Kinetics Paradigm vs. Small Cap Value | Kinetics Paradigm vs. Small Midcap Dividend Income | Kinetics Paradigm vs. Ancorathelen Small Mid Cap | Kinetics Paradigm vs. Oklahoma College Savings |
| Frost Kempner vs. Frost Kempner Multi Cap | Frost Kempner vs. Brokerage And Investment | Frost Kempner vs. Nationwide Mid Cap | Frost Kempner vs. Angel Oak Ultrashort |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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