Correlation Between Kinetics Small and Artisan Small
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Artisan Small 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 Artisan Small 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 Artisan Small Cap, you can compare the effects of market volatilities on Kinetics Small and Artisan Small 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 Artisan Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Artisan Small.
Diversification Opportunities for Kinetics Small and Artisan Small
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinetics and Artisan is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Artisan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Small Cap 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 Artisan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Small Cap has no effect on the direction of Kinetics Small i.e., Kinetics Small and Artisan Small go up and down completely randomly.
Pair Corralation between Kinetics Small and Artisan Small
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.47 times more return on investment than Artisan Small. However, Kinetics Small is 1.47 times more volatile than Artisan Small Cap. It trades about -0.04 of its potential returns per unit of risk. Artisan Small Cap is currently generating about -0.3 per unit of risk. If you would invest 19,601 in Kinetics Small Cap on December 15, 2024 and sell it today you would lose (547.00) from holding Kinetics Small Cap or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Artisan Small Cap
Performance |
| Timeline |
| Kinetics Small Cap |
| Artisan Small Cap |
Kinetics Small and Artisan Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Artisan Small
The main advantage of trading using opposite Kinetics Small and Artisan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Artisan Small 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 Artisan Small will offset losses from the drop in Artisan Small's long position.| Kinetics Small vs. Aqr Global Macro | ||
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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