Correlation Between Kinetics Small and Acclivity Mid
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Acclivity Mid 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 Acclivity Mid 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 Acclivity Mid Cap, you can compare the effects of market volatilities on Kinetics Small and Acclivity Mid 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 Acclivity Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Acclivity Mid.
Diversification Opportunities for Kinetics Small and Acclivity Mid
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and Acclivity is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Acclivity Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acclivity Mid 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 Acclivity Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acclivity Mid Cap has no effect on the direction of Kinetics Small i.e., Kinetics Small and Acclivity Mid go up and down completely randomly.
Pair Corralation between Kinetics Small and Acclivity Mid
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.55 times more return on investment than Acclivity Mid. However, Kinetics Small is 1.55 times more volatile than Acclivity Mid Cap. It trades about 0.07 of its potential returns per unit of risk. Acclivity Mid Cap is currently generating about 0.08 per unit of risk. If you would invest 13,561 in Kinetics Small Cap on September 3, 2024 and sell it today you would earn a total of 8,660 from holding Kinetics Small Cap or generate 63.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Acclivity Mid Cap
Performance |
| Timeline |
| Kinetics Small Cap |
| Acclivity Mid Cap |
Kinetics Small and Acclivity Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Acclivity Mid
The main advantage of trading using opposite Kinetics Small and Acclivity Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Acclivity Mid 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 Acclivity Mid will offset losses from the drop in Acclivity Mid's long position.| Kinetics Small vs. The Hartford Midcap | Kinetics Small vs. Mfs Emerging Markets | Kinetics Small vs. Wells Fargo Special | Kinetics Small vs. Washington Mutual Investors |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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