Correlation Between Kinetics Small and Hartford Midcap
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Hartford Midcap 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 Hartford Midcap 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 The Hartford Midcap, you can compare the effects of market volatilities on Kinetics Small and Hartford Midcap 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 Hartford Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Hartford Midcap.
Diversification Opportunities for Kinetics Small and Hartford Midcap
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Hartford is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap 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 Hartford Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Midcap has no effect on the direction of Kinetics Small i.e., Kinetics Small and Hartford Midcap go up and down completely randomly.
Pair Corralation between Kinetics Small and Hartford Midcap
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 2.43 times more return on investment than Hartford Midcap. However, Kinetics Small is 2.43 times more volatile than The Hartford Midcap. It trades about 0.25 of its potential returns per unit of risk. The Hartford Midcap is currently generating about 0.17 per unit of risk. If you would invest 14,039 in Kinetics Small Cap on September 12, 2024 and sell it today you would earn a total of 5,591 from holding Kinetics Small Cap or generate 39.82% 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. The Hartford Midcap
Performance |
| Timeline |
| Kinetics Small Cap |
| Hartford Midcap |
Kinetics Small and Hartford Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Hartford Midcap
The main advantage of trading using opposite Kinetics Small and Hartford Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Hartford Midcap 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 Hartford Midcap will offset losses from the drop in Hartford Midcap's long position.| Kinetics Small vs. Needham Aggressive Growth | Kinetics Small vs. Ultramid Cap Profund Ultramid Cap | Kinetics Small vs. HUMANA INC | Kinetics Small vs. Barloworld Ltd ADR |
| Hartford Midcap vs. Europacific Growth Fund | Hartford Midcap vs. Washington Mutual Investors | Hartford Midcap vs. Wells Fargo Special | Hartford Midcap vs. Mfs Emerging Markets |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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