Correlation Between Kinetics Small and General Money
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and General Money 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 General Money 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 General Money Market, you can compare the effects of market volatilities on Kinetics Small and General Money 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 General Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and General Money.
Diversification Opportunities for Kinetics Small and General Money
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and General is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and General Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Money Market 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 General Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Money Market has no effect on the direction of Kinetics Small i.e., Kinetics Small and General Money go up and down completely randomly.
Pair Corralation between Kinetics Small and General Money
If you would invest 18,792 in Kinetics Small Cap on September 4, 2024 and sell it today you would earn a total of 3,086 from holding Kinetics Small Cap or generate 16.42% 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. General Money Market
Performance |
| Timeline |
| Kinetics Small Cap |
| General Money Market |
Kinetics Small and General Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and General Money
The main advantage of trading using opposite Kinetics Small and General Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, General Money 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 General Money will offset losses from the drop in General Money's long position.| Kinetics Small vs. Touchstone Small Cap | Kinetics Small vs. Small Pany Growth | Kinetics Small vs. Rbc Small Cap | Kinetics Small vs. Templeton Global Smaller |
| General Money vs. Vanguard Total Stock | General Money vs. Vanguard 500 Index | General Money vs. Vanguard Total Stock | General Money vs. Vanguard Total Stock |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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