Correlation Between Kinetics Small and Fidelity Puritan
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Fidelity Puritan 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 Fidelity Puritan 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 Fidelity Puritan Fund, you can compare the effects of market volatilities on Kinetics Small and Fidelity Puritan 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 Fidelity Puritan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Fidelity Puritan.
Diversification Opportunities for Kinetics Small and Fidelity Puritan
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Fidelity is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Fidelity Puritan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Puritan 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 Fidelity Puritan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Puritan has no effect on the direction of Kinetics Small i.e., Kinetics Small and Fidelity Puritan go up and down completely randomly.
Pair Corralation between Kinetics Small and Fidelity Puritan
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 4.33 times more return on investment than Fidelity Puritan. However, Kinetics Small is 4.33 times more volatile than Fidelity Puritan Fund. It trades about 0.42 of its potential returns per unit of risk. Fidelity Puritan Fund is currently generating about 0.17 per unit of risk. If you would invest 18,085 in Kinetics Small Cap on August 30, 2024 and sell it today you would earn a total of 5,066 from holding Kinetics Small Cap or generate 28.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Fidelity Puritan Fund
Performance |
| Timeline |
| Kinetics Small Cap |
| Fidelity Puritan |
Kinetics Small and Fidelity Puritan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Fidelity Puritan
The main advantage of trading using opposite Kinetics Small and Fidelity Puritan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Fidelity Puritan 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 Fidelity Puritan will offset losses from the drop in Fidelity Puritan's long position.| Kinetics Small vs. Kinetics Global Fund | Kinetics Small vs. Kinetics Global Fund | Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Internet Fund |
| Fidelity Puritan vs. Kinetics Small Cap | Fidelity Puritan vs. Small Pany Growth | Fidelity Puritan vs. T Rowe Price | Fidelity Puritan vs. Small Midcap Dividend Income |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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