Correlation Between Kinetics Small and Federated High
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Federated High 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 Federated High 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 Federated High Income, you can compare the effects of market volatilities on Kinetics Small and Federated High 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 Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Federated High.
Diversification Opportunities for Kinetics Small and Federated High
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinetics and Federated is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Federated High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High 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 Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Income has no effect on the direction of Kinetics Small i.e., Kinetics Small and Federated High go up and down completely randomly.
Pair Corralation between Kinetics Small and Federated High
If you would invest 18,530 in Kinetics Small Cap on September 2, 2024 and sell it today you would earn a total of 4,268 from holding Kinetics Small Cap or generate 23.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Kinetics Small Cap vs. Federated High Income
Performance |
| Timeline |
| Kinetics Small Cap |
| Federated High Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinetics Small and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Federated High
The main advantage of trading using opposite Kinetics Small and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Federated High 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 Federated High will offset losses from the drop in Federated High's long position.| Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Market Opportunities | Kinetics Small vs. Pear Tree Polaris | Kinetics Small vs. Amg Managers Loomis |
| Federated High vs. Global Technology Portfolio | Federated High vs. Blackrock Science Technology | Federated High vs. Science Technology Fund | Federated High vs. Allianzgi Technology 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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