Correlation Between Kinetics Small and Aaminsight Select
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Aaminsight Select 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 Aaminsight Select 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 Aaminsight Select Income, you can compare the effects of market volatilities on Kinetics Small and Aaminsight Select 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 Aaminsight Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Aaminsight Select.
Diversification Opportunities for Kinetics Small and Aaminsight Select
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kinetics and Aaminsight is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Aaminsight Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aaminsight Select Income 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 Aaminsight Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aaminsight Select Income has no effect on the direction of Kinetics Small i.e., Kinetics Small and Aaminsight Select go up and down completely randomly.
Pair Corralation between Kinetics Small and Aaminsight Select
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 4.25 times more return on investment than Aaminsight Select. However, Kinetics Small is 4.25 times more volatile than Aaminsight Select Income. It trades about 0.12 of its potential returns per unit of risk. Aaminsight Select Income is currently generating about 0.08 per unit of risk. If you would invest 10,586 in Kinetics Small Cap on September 12, 2024 and sell it today you would earn a total of 9,320 from holding Kinetics Small Cap or generate 88.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Aaminsight Select Income
Performance |
| Timeline |
| Kinetics Small Cap |
| Aaminsight Select Income |
Kinetics Small and Aaminsight Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Aaminsight Select
The main advantage of trading using opposite Kinetics Small and Aaminsight Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Aaminsight Select 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 Aaminsight Select will offset losses from the drop in Aaminsight Select's long position.| Kinetics Small vs. Aqr Small Cap | Kinetics Small vs. Pace Smallmedium Value | Kinetics Small vs. Lebenthal Lisanti Small | Kinetics Small vs. Old Westbury Small |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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