Correlation Between Kinetics Small and Catalyst Insider
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Catalyst Insider 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 Catalyst Insider 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 Catalyst Insider Buying, you can compare the effects of market volatilities on Kinetics Small and Catalyst Insider 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 Catalyst Insider. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Catalyst Insider.
Diversification Opportunities for Kinetics Small and Catalyst Insider
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Catalyst is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Catalyst Insider Buying in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Insider Buying 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 Catalyst Insider. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Insider Buying has no effect on the direction of Kinetics Small i.e., Kinetics Small and Catalyst Insider go up and down completely randomly.
Pair Corralation between Kinetics Small and Catalyst Insider
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 2.25 times more return on investment than Catalyst Insider. However, Kinetics Small is 2.25 times more volatile than Catalyst Insider Buying. It trades about 0.25 of its potential returns per unit of risk. Catalyst Insider Buying is currently generating about 0.24 per unit of risk. 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Catalyst Insider Buying
Performance |
| Timeline |
| Kinetics Small Cap |
| Catalyst Insider Buying |
Kinetics Small and Catalyst Insider Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Catalyst Insider
The main advantage of trading using opposite Kinetics Small and Catalyst Insider positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Catalyst Insider 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 Catalyst Insider will offset losses from the drop in Catalyst Insider'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 |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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