Correlation Between Kinetics Paradigm and Alphacentric Hedged
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Alphacentric Hedged 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 Alphacentric Hedged 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 Alphacentric Hedged Market, you can compare the effects of market volatilities on Kinetics Paradigm and Alphacentric Hedged 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 Alphacentric Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Alphacentric Hedged.
Diversification Opportunities for Kinetics Paradigm and Alphacentric Hedged
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Alphacentric is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Alphacentric Hedged Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Hedged 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 Alphacentric Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Hedged has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Alphacentric Hedged go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Alphacentric Hedged
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.25 times more return on investment than Alphacentric Hedged. However, Kinetics Paradigm is 3.25 times more volatile than Alphacentric Hedged Market. It trades about 0.08 of its potential returns per unit of risk. Alphacentric Hedged Market is currently generating about 0.08 per unit of risk. If you would invest 9,753 in Kinetics Paradigm Fund on August 30, 2024 and sell it today you would earn a total of 9,146 from holding Kinetics Paradigm Fund or generate 93.78% 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. Alphacentric Hedged Market
Performance |
| Timeline |
| Kinetics Paradigm |
| Alphacentric Hedged |
Kinetics Paradigm and Alphacentric Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Alphacentric Hedged
The main advantage of trading using opposite Kinetics Paradigm and Alphacentric Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Alphacentric Hedged 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 Alphacentric Hedged will offset losses from the drop in Alphacentric Hedged's long position.| Kinetics Paradigm vs. T Rowe Price | Kinetics Paradigm vs. Qs Large Cap | Kinetics Paradigm vs. Balanced Fund Investor | Kinetics Paradigm vs. Ab Value Fund |
| Alphacentric Hedged vs. Jpmorgan Hedged Equity | Alphacentric Hedged vs. Jpmorgan Hedged Equity | Alphacentric Hedged vs. Gateway Fund Class | Alphacentric Hedged vs. Gateway Fund Class |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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