Correlation Between Kinetics Small and Champlain Small
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Champlain 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 Champlain 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 Champlain Small, you can compare the effects of market volatilities on Kinetics Small and Champlain 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 Champlain Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Champlain Small.
Diversification Opportunities for Kinetics Small and Champlain Small
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Champlain is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Champlain Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Small 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 Champlain Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Small has no effect on the direction of Kinetics Small i.e., Kinetics Small and Champlain Small go up and down completely randomly.
Pair Corralation between Kinetics Small and Champlain Small
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.26 times more return on investment than Champlain Small. However, Kinetics Small is 1.26 times more volatile than Champlain Small. It trades about 0.07 of its potential returns per unit of risk. Champlain Small is currently generating about 0.02 per unit of risk. If you would invest 12,156 in Kinetics Small Cap on October 20, 2024 and sell it today you would earn a total of 8,177 from holding Kinetics Small Cap or generate 67.27% 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. Champlain Small
Performance |
| Timeline |
| Kinetics Small Cap |
| Champlain Small |
Kinetics Small and Champlain Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Champlain Small
The main advantage of trading using opposite Kinetics Small and Champlain Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Champlain 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 Champlain Small will offset losses from the drop in Champlain Small's long position.| Kinetics Small vs. Vanguard Health Care | Kinetics Small vs. Eventide Healthcare Life | Kinetics Small vs. Baillie Gifford Health | Kinetics Small vs. Tekla Healthcare Investors |
| Champlain Small vs. The Hartford Midcap | Champlain Small vs. Mfs Emerging Markets | Champlain Small vs. Wells Fargo Special | Champlain Small vs. Washington Mutual Investors |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |