Correlation Between Kinetics Small and Cullen International
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Cullen International 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 Cullen International 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 Cullen International High, you can compare the effects of market volatilities on Kinetics Small and Cullen International 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 Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Cullen International.
Diversification Opportunities for Kinetics Small and Cullen International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinetics and Cullen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Cullen International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen International High 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 Cullen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen International High has no effect on the direction of Kinetics Small i.e., Kinetics Small and Cullen International go up and down completely randomly.
Pair Corralation between Kinetics Small and Cullen International
Assuming the 90 days horizon Kinetics Small is expected to generate 11.7 times less return on investment than Cullen International. In addition to that, Kinetics Small is 2.3 times more volatile than Cullen International High. It trades about 0.01 of its total potential returns per unit of risk. Cullen International High is currently generating about 0.29 per unit of volatility. If you would invest 1,090 in Cullen International High on November 28, 2024 and sell it today you would earn a total of 47.00 from holding Cullen International High or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Cullen International High
Performance |
| Timeline |
| Kinetics Small Cap |
| Cullen International High |
Kinetics Small and Cullen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Cullen International
The main advantage of trading using opposite Kinetics Small and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Cullen International 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 Cullen International will offset losses from the drop in Cullen International'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 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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