Correlation Between Kinetics Small and Eventide Healthcare
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Eventide Healthcare 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 Eventide Healthcare 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 Eventide Healthcare Life, you can compare the effects of market volatilities on Kinetics Small and Eventide Healthcare 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 Eventide Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Eventide Healthcare.
Diversification Opportunities for Kinetics Small and Eventide Healthcare
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Eventide is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Eventide Healthcare Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Healthcare Life 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 Eventide Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Healthcare Life has no effect on the direction of Kinetics Small i.e., Kinetics Small and Eventide Healthcare go up and down completely randomly.
Pair Corralation between Kinetics Small and Eventide Healthcare
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.36 times more return on investment than Eventide Healthcare. However, Kinetics Small is 1.36 times more volatile than Eventide Healthcare Life. It trades about 0.27 of its potential returns per unit of risk. Eventide Healthcare Life is currently generating about 0.04 per unit of risk. If you would invest 11,762 in Kinetics Small Cap on September 1, 2024 and sell it today you would earn a total of 11,036 from holding Kinetics Small Cap or generate 93.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Eventide Healthcare Life
Performance |
| Timeline |
| Kinetics Small Cap |
| Eventide Healthcare Life |
Kinetics Small and Eventide Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Eventide Healthcare
The main advantage of trading using opposite Kinetics Small and Eventide Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Eventide Healthcare 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 Eventide Healthcare will offset losses from the drop in Eventide Healthcare's long position.| Kinetics Small vs. Leggmason Partners Institutional | Kinetics Small vs. Scharf Global Opportunity | Kinetics Small vs. Qs Large Cap | Kinetics Small vs. Abr 7525 Volatility |
| Eventide Healthcare vs. Black Oak Emerging | Eventide Healthcare vs. Ashmore Emerging Markets | Eventide Healthcare vs. Angel Oak Multi Strategy | Eventide Healthcare vs. Rbc Emerging Markets |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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