Correlation Between Kinetics Small and Congressional Effect
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Congressional Effect 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 Congressional Effect 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 Congressional Effect Fund, you can compare the effects of market volatilities on Kinetics Small and Congressional Effect 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 Congressional Effect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Congressional Effect.
Diversification Opportunities for Kinetics Small and Congressional Effect
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinetics and Congressional is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Congressional Effect Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Congressional Effect 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 Congressional Effect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Congressional Effect has no effect on the direction of Kinetics Small i.e., Kinetics Small and Congressional Effect go up and down completely randomly.
Pair Corralation between Kinetics Small and Congressional Effect
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 2.03 times more return on investment than Congressional Effect. However, Kinetics Small is 2.03 times more volatile than Congressional Effect Fund. It trades about 0.08 of its potential returns per unit of risk. Congressional Effect Fund is currently generating about 0.07 per unit of risk. If you would invest 10,574 in Kinetics Small Cap on December 4, 2024 and sell it today you would earn a total of 8,712 from holding Kinetics Small Cap or generate 82.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Congressional Effect Fund
Performance |
| Timeline |
| Kinetics Small Cap |
| Congressional Effect |
Kinetics Small and Congressional Effect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Congressional Effect
The main advantage of trading using opposite Kinetics Small and Congressional Effect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Congressional Effect 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 Congressional Effect will offset losses from the drop in Congressional Effect's long position.| Kinetics Small vs. Stone Ridge Diversified | Kinetics Small vs. Federated Hermes Conservative | Kinetics Small vs. Manning Napier Diversified | Kinetics Small vs. Calvert Conservative Allocation |
| Congressional Effect vs. Pnc Balanced Allocation | Congressional Effect vs. Gmo Asset Allocation | Congressional Effect vs. Growth Allocation Fund | Congressional Effect vs. Guidemark Large Cap |
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 CEOs Directory module to screen CEOs from public companies around the world.
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