Correlation Between Kinetics Small and Catalyst Exceed
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Catalyst Exceed 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 Exceed 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 Exceed Defined, you can compare the effects of market volatilities on Kinetics Small and Catalyst Exceed 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 Exceed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Catalyst Exceed.
Diversification Opportunities for Kinetics Small and Catalyst Exceed
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Catalyst is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Catalyst Exceed Defined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Exceed Defined 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 Exceed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Exceed Defined has no effect on the direction of Kinetics Small i.e., Kinetics Small and Catalyst Exceed go up and down completely randomly.
Pair Corralation between Kinetics Small and Catalyst Exceed
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 3.83 times more return on investment than Catalyst Exceed. However, Kinetics Small is 3.83 times more volatile than Catalyst Exceed Defined. It trades about 0.25 of its potential returns per unit of risk. Catalyst Exceed Defined is currently generating about 0.22 per unit of risk. If you would invest 18,792 in Kinetics Small Cap on September 4, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Catalyst Exceed Defined
Performance |
| Timeline |
| Kinetics Small Cap |
| Catalyst Exceed Defined |
Kinetics Small and Catalyst Exceed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Catalyst Exceed
The main advantage of trading using opposite Kinetics Small and Catalyst Exceed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Catalyst Exceed 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 Exceed will offset losses from the drop in Catalyst Exceed's long position.| Kinetics Small vs. Touchstone Small Cap | Kinetics Small vs. Small Pany Growth | Kinetics Small vs. Rbc Small Cap | Kinetics Small vs. Templeton Global Smaller |
| Catalyst Exceed vs. Clearbridge Energy Mlp | Catalyst Exceed vs. Energy Basic Materials | Catalyst Exceed vs. Gamco Natural Resources | Catalyst Exceed vs. Energy Basic Materials |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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