Correlation Between Kinetics Small and Catalyst Hedged
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Catalyst Hedged 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 Catalyst Hedged 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 Catalyst Hedged Modity, you can compare the effects of market volatilities on Kinetics Small and Catalyst Hedged 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 Catalyst Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Catalyst Hedged.
Diversification Opportunities for Kinetics Small and Catalyst Hedged
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kinetics and Catalyst is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Catalyst Hedged Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Hedged Modity 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 Catalyst Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Hedged Modity has no effect on the direction of Kinetics Small i.e., Kinetics Small and Catalyst Hedged go up and down completely randomly.
Pair Corralation between Kinetics Small and Catalyst Hedged
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.88 times more return on investment than Catalyst Hedged. However, Kinetics Small is 1.88 times more volatile than Catalyst Hedged Modity. It trades about 0.09 of its potential returns per unit of risk. Catalyst Hedged Modity is currently generating about -0.01 per unit of risk. If you would invest 12,589 in Kinetics Small Cap on September 3, 2024 and sell it today you would earn a total of 9,289 from holding Kinetics Small Cap or generate 73.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Catalyst Hedged Modity
Performance |
| Timeline |
| Kinetics Small Cap |
| Catalyst Hedged Modity |
Kinetics Small and Catalyst Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Catalyst Hedged
The main advantage of trading using opposite Kinetics Small and Catalyst Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Catalyst Hedged 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 Catalyst Hedged will offset losses from the drop in Catalyst Hedged's long position.| Kinetics Small vs. General Money Market | Kinetics Small vs. Matson Money Equity | Kinetics Small vs. Ashmore Emerging Markets | Kinetics Small vs. Aig Government Money |
| Catalyst Hedged vs. Gabelli Convertible And | Catalyst Hedged vs. Lord Abbett Convertible | Catalyst Hedged vs. Virtus Convertible | Catalyst Hedged vs. Allianzgi Convertible Income |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |