Correlation Between Kinetics Small and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Mainstay High 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 Mainstay High 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 Mainstay High Yield, you can compare the effects of market volatilities on Kinetics Small and Mainstay High 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 Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Mainstay High.
Diversification Opportunities for Kinetics Small and Mainstay High
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Mainstay is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield 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 Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of Kinetics Small i.e., Kinetics Small and Mainstay High go up and down completely randomly.
Pair Corralation between Kinetics Small and Mainstay High
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 6.16 times more return on investment than Mainstay High. However, Kinetics Small is 6.16 times more volatile than Mainstay High Yield. It trades about 0.08 of its potential returns per unit of risk. Mainstay High Yield is currently generating about 0.14 per unit of risk. If you would invest 13,382 in Kinetics Small Cap on September 2, 2024 and sell it today you would earn a total of 8,839 from holding Kinetics Small Cap or generate 66.05% 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. Mainstay High Yield
Performance |
| Timeline |
| Kinetics Small Cap |
| Mainstay High Yield |
Kinetics Small and Mainstay High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Mainstay High
The main advantage of trading using opposite Kinetics Small and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Mainstay High 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 Mainstay High will offset losses from the drop in Mainstay High'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 |
| Mainstay High vs. Ultra Short Fixed Income | Mainstay High vs. Franklin Federal Limited Term | Mainstay High vs. Aqr Sustainable Long Short | Mainstay High vs. Quantitative Longshort Equity |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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