Correlation Between Kinetics Small and Chase Growth
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Chase Growth 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 Chase Growth 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 Chase Growth Fund, you can compare the effects of market volatilities on Kinetics Small and Chase Growth 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 Chase Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Chase Growth.
Diversification Opportunities for Kinetics Small and Chase Growth
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and Chase is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Chase Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chase Growth 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 Chase Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chase Growth has no effect on the direction of Kinetics Small i.e., Kinetics Small and Chase Growth go up and down completely randomly.
Pair Corralation between Kinetics Small and Chase Growth
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 2.25 times more return on investment than Chase Growth. However, Kinetics Small is 2.25 times more volatile than Chase Growth Fund. It trades about 0.38 of its potential returns per unit of risk. Chase Growth Fund is currently generating about 0.26 per unit of risk. If you would invest 14,141 in Kinetics Small Cap on September 2, 2024 and sell it today you would earn a total of 8,080 from holding Kinetics Small Cap or generate 57.14% 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. Chase Growth Fund
Performance |
| Timeline |
| Kinetics Small Cap |
| Chase Growth |
Kinetics Small and Chase Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Chase Growth
The main advantage of trading using opposite Kinetics Small and Chase Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Chase Growth 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 Chase Growth will offset losses from the drop in Chase Growth'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 |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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