Correlation Between Kinetics Small and Grizzly Short
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Grizzly Short 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 Grizzly Short 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 Grizzly Short Fund, you can compare the effects of market volatilities on Kinetics Small and Grizzly Short 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 Grizzly Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Grizzly Short.
Diversification Opportunities for Kinetics Small and Grizzly Short
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kinetics and Grizzly is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Grizzly Short Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grizzly Short 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 Grizzly Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grizzly Short has no effect on the direction of Kinetics Small i.e., Kinetics Small and Grizzly Short go up and down completely randomly.
Pair Corralation between Kinetics Small and Grizzly Short
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 3.0 times more return on investment than Grizzly Short. However, Kinetics Small is 3.0 times more volatile than Grizzly Short Fund. It trades about 0.39 of its potential returns per unit of risk. Grizzly Short Fund is currently generating about -0.3 per unit of risk. If you would invest 17,965 in Kinetics Small Cap on August 31, 2024 and sell it today you would earn a total of 4,601 from holding Kinetics Small Cap or generate 25.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Grizzly Short Fund
Performance |
| Timeline |
| Kinetics Small Cap |
| Grizzly Short |
Kinetics Small and Grizzly Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Grizzly Short
The main advantage of trading using opposite Kinetics Small and Grizzly Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Grizzly Short 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 Grizzly Short will offset losses from the drop in Grizzly Short'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 |
| Grizzly Short vs. Needham Aggressive Growth | Grizzly Short vs. Pace High Yield | Grizzly Short vs. Artisan High Income | Grizzly Short vs. Aquila Three Peaks |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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