Correlation Between Kinetics Small and Kellner Merger
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Kellner Merger 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 Kellner Merger 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 Kellner Merger Fund, you can compare the effects of market volatilities on Kinetics Small and Kellner Merger 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 Kellner Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Kellner Merger.
Diversification Opportunities for Kinetics Small and Kellner Merger
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and Kellner is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Kellner Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellner Merger 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 Kellner Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellner Merger has no effect on the direction of Kinetics Small i.e., Kinetics Small and Kellner Merger go up and down completely randomly.
Pair Corralation between Kinetics Small and Kellner Merger
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 4.89 times more return on investment than Kellner Merger. However, Kinetics Small is 4.89 times more volatile than Kellner Merger Fund. It trades about 0.07 of its potential returns per unit of risk. Kellner Merger Fund is currently generating about 0.01 per unit of risk. If you would invest 13,842 in Kinetics Small Cap on September 3, 2024 and sell it today you would earn a total of 8,036 from holding Kinetics Small Cap or generate 58.06% 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. Kellner Merger Fund
Performance |
| Timeline |
| Kinetics Small Cap |
| Kellner Merger |
Kinetics Small and Kellner Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Kellner Merger
The main advantage of trading using opposite Kinetics Small and Kellner Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Kellner Merger 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 Kellner Merger will offset losses from the drop in Kellner Merger's long position.| Kinetics Small vs. General Money Market | Kinetics Small vs. Matson Money Equity | Kinetics Small vs. Ashmore Emerging Markets | Kinetics Small vs. Aig Government Money |
| Kellner Merger vs. Massmutual Premier Diversified | Kellner Merger vs. Massmutual Select Diversified | Kellner Merger vs. Calvert Conservative Allocation | Kellner Merger vs. Western Asset Diversified |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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