Correlation Between Kinetics Small and Alger Small
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Alger 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 Small and Alger Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Small Cap and Alger Small Cap, you can compare the effects of market volatilities on Kinetics Small and Alger 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 Small with a short position of Alger Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Alger Small.
Diversification Opportunities for Kinetics Small and Alger Small
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Alger is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Alger Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Small Cap and Kinetics Small 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 Small Cap are associated (or correlated) with Alger Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Small Cap has no effect on the direction of Kinetics Small i.e., Kinetics Small and Alger Small go up and down completely randomly.
Pair Corralation between Kinetics Small and Alger Small
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.18 times more return on investment than Alger Small. However, Kinetics Small is 1.18 times more volatile than Alger Small Cap. It trades about 0.51 of its potential returns per unit of risk. Alger Small Cap is currently generating about 0.1 per unit of risk. If you would invest 17,452 in Kinetics Small Cap on October 24, 2024 and sell it today you would earn a total of 2,596 from holding Kinetics Small Cap or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Alger Small Cap
Performance |
| Timeline |
| Kinetics Small Cap |
| Alger Small Cap |
Kinetics Small and Alger Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Alger Small
The main advantage of trading using opposite Kinetics Small and Alger Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Alger 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 Alger Small will offset losses from the drop in Alger Small's long position.| Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Market Opportunities | Kinetics Small vs. Pear Tree Polaris | Kinetics Small vs. Amg Managers Loomis |
| Alger Small vs. Alger Spectra Fund | Alger Small vs. Alger Smidcap Focus | Alger Small vs. Alger Funds Mid | Alger Small vs. Alger Capital Appreciation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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