Correlation Between Kinetics Small and Ladenburg Aggressive
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Ladenburg Aggressive 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 Ladenburg Aggressive 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 Ladenburg Aggressive Growth, you can compare the effects of market volatilities on Kinetics Small and Ladenburg Aggressive 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 Ladenburg Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Ladenburg Aggressive.
Diversification Opportunities for Kinetics Small and Ladenburg Aggressive
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and Ladenburg is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Ladenburg Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Aggressive 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 Ladenburg Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Aggressive has no effect on the direction of Kinetics Small i.e., Kinetics Small and Ladenburg Aggressive go up and down completely randomly.
Pair Corralation between Kinetics Small and Ladenburg Aggressive
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 3.12 times more return on investment than Ladenburg Aggressive. However, Kinetics Small is 3.12 times more volatile than Ladenburg Aggressive Growth. It trades about 0.42 of its potential returns per unit of risk. Ladenburg Aggressive Growth is currently generating about 0.24 per unit of risk. If you would invest 18,085 in Kinetics Small Cap on August 30, 2024 and sell it today you would earn a total of 5,066 from holding Kinetics Small Cap or generate 28.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Ladenburg Aggressive Growth
Performance |
| Timeline |
| Kinetics Small Cap |
| Ladenburg Aggressive |
Kinetics Small and Ladenburg Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Ladenburg Aggressive
The main advantage of trading using opposite Kinetics Small and Ladenburg Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Ladenburg Aggressive 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 Ladenburg Aggressive will offset losses from the drop in Ladenburg Aggressive's long position.| Kinetics Small vs. Kinetics Global Fund | Kinetics Small vs. Kinetics Global Fund | Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Internet Fund |
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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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