Correlation Between Kinetics Small and Eagle Growth
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Eagle Growth 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 Eagle Growth 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 Eagle Growth Income, you can compare the effects of market volatilities on Kinetics Small and Eagle Growth 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 Eagle Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Eagle Growth.
Diversification Opportunities for Kinetics Small and Eagle Growth
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Eagle is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Eagle Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Growth 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 Eagle Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Growth Income has no effect on the direction of Kinetics Small i.e., Kinetics Small and Eagle Growth go up and down completely randomly.
Pair Corralation between Kinetics Small and Eagle Growth
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 2.73 times more return on investment than Eagle Growth. However, Kinetics Small is 2.73 times more volatile than Eagle Growth Income. It trades about 0.27 of its potential returns per unit of risk. Eagle Growth Income is currently generating about 0.16 per unit of risk. If you would invest 11,762 in Kinetics Small Cap on September 1, 2024 and sell it today you would earn a total of 11,036 from holding Kinetics Small Cap or generate 93.83% 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. Eagle Growth Income
Performance |
| Timeline |
| Kinetics Small Cap |
| Eagle Growth Income |
Kinetics Small and Eagle Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Eagle Growth
The main advantage of trading using opposite Kinetics Small and Eagle Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Eagle Growth 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 Eagle Growth will offset losses from the drop in Eagle Growth's long position.| Kinetics Small vs. Leggmason Partners Institutional | Kinetics Small vs. Scharf Global Opportunity | Kinetics Small vs. Qs Large Cap | Kinetics Small vs. Abr 7525 Volatility |
| Eagle Growth vs. Artisan Small Cap | Eagle Growth vs. Legg Mason Partners | Eagle Growth vs. Champlain Mid Cap | Eagle Growth vs. Chase Growth 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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