Correlation Between Kinetics Small and Mfs Value
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Mfs Value 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 Mfs Value 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 Mfs Value Fund, you can compare the effects of market volatilities on Kinetics Small and Mfs Value 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 Mfs Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Mfs Value.
Diversification Opportunities for Kinetics Small and Mfs Value
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Mfs is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Mfs Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Value Fund 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 Mfs Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Value Fund has no effect on the direction of Kinetics Small i.e., Kinetics Small and Mfs Value go up and down completely randomly.
Pair Corralation between Kinetics Small and Mfs Value
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 3.57 times more return on investment than Mfs Value. However, Kinetics Small is 3.57 times more volatile than Mfs Value Fund. It trades about 0.4 of its potential returns per unit of risk. Mfs Value Fund is currently generating about 0.18 per unit of risk. If you would invest 17,841 in Kinetics Small Cap on August 29, 2024 and sell it today you would earn a total of 4,656 from holding Kinetics Small Cap or generate 26.1% 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. Mfs Value Fund
Performance |
| Timeline |
| Kinetics Small Cap |
| Mfs Value Fund |
Kinetics Small and Mfs Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Mfs Value
The main advantage of trading using opposite Kinetics Small and Mfs Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Mfs Value 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 Mfs Value will offset losses from the drop in Mfs Value's long position.| Kinetics Small vs. Multisector Bond Sma | Kinetics Small vs. Icon Bond Fund | Kinetics Small vs. Ambrus Core Bond | Kinetics Small vs. Blrc Sgy Mnp |
| Mfs Value vs. Mfs Aggressive Growth | Mfs Value vs. Mfs Research Fund | Mfs Value vs. Mfs Series Trust | Mfs Value vs. Mfs California Municipal |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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