Correlation Between Kinetics Small and Causeway International
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Causeway International 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 Causeway International 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 Causeway International Opportunities, you can compare the effects of market volatilities on Kinetics Small and Causeway International 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 Causeway International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Causeway International.
Diversification Opportunities for Kinetics Small and Causeway International
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and Causeway is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Causeway International Opportu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Causeway International 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 Causeway International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Causeway International has no effect on the direction of Kinetics Small i.e., Kinetics Small and Causeway International go up and down completely randomly.
Pair Corralation between Kinetics Small and Causeway International
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 4.16 times more return on investment than Causeway International. However, Kinetics Small is 4.16 times more volatile than Causeway International Opportunities. It trades about 0.26 of its potential returns per unit of risk. Causeway International Opportunities is currently generating about -0.16 per unit of risk. If you would invest 18,792 in Kinetics Small Cap on September 3, 2024 and sell it today you would earn a total of 3,086 from holding Kinetics Small Cap or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Causeway International Opportu
Performance |
| Timeline |
| Kinetics Small Cap |
| Causeway International |
Kinetics Small and Causeway International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Causeway International
The main advantage of trading using opposite Kinetics Small and Causeway International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Causeway International 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 Causeway International will offset losses from the drop in Causeway International'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 |
| Causeway International vs. Qs Growth Fund | Causeway International vs. T Rowe Price | Causeway International vs. Vanguard Windsor Fund | Causeway International vs. Commonwealth Global Fund |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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