Correlation Between Kinetics Small and Fidelity Canada
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Fidelity Canada 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 Canada 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 Canada Fund, you can compare the effects of market volatilities on Kinetics Small and Fidelity Canada 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 Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Fidelity Canada.
Diversification Opportunities for Kinetics Small and Fidelity Canada
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Fidelity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Fidelity Canada Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canada 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 Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canada has no effect on the direction of Kinetics Small i.e., Kinetics Small and Fidelity Canada go up and down completely randomly.
Pair Corralation between Kinetics Small and Fidelity Canada
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.97 times more return on investment than Fidelity Canada. However, Kinetics Small is 1.97 times more volatile than Fidelity Canada Fund. It trades about 0.12 of its potential returns per unit of risk. Fidelity Canada Fund is currently generating about 0.06 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Fidelity Canada Fund
Performance |
| Timeline |
| Kinetics Small Cap |
| Fidelity Canada |
Kinetics Small and Fidelity Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Fidelity Canada
The main advantage of trading using opposite Kinetics Small and Fidelity Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Fidelity Canada 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 Canada will offset losses from the drop in Fidelity Canada'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 |
| Fidelity Canada vs. Fidelity Canada Fund | Fidelity Canada vs. Asia Pacific Small | Fidelity Canada vs. HUMANA INC | Fidelity Canada vs. Aquagold International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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