Correlation Between Kinetics Small and Mainstay Epoch
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Mainstay Epoch 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 Mainstay Epoch 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 Mainstay Epoch Small, you can compare the effects of market volatilities on Kinetics Small and Mainstay Epoch 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 Mainstay Epoch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Mainstay Epoch.
Diversification Opportunities for Kinetics Small and Mainstay Epoch
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and Mainstay is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Mainstay Epoch Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Small 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 Mainstay Epoch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Epoch Small has no effect on the direction of Kinetics Small i.e., Kinetics Small and Mainstay Epoch go up and down completely randomly.
Pair Corralation between Kinetics Small and Mainstay Epoch
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.17 times more return on investment than Mainstay Epoch. However, Kinetics Small is 1.17 times more volatile than Mainstay Epoch Small. It trades about 0.07 of its potential returns per unit of risk. Mainstay Epoch Small is currently generating about 0.05 per unit of risk. If you would invest 13,895 in Kinetics Small Cap on September 4, 2024 and sell it today you would earn a total of 7,983 from holding Kinetics Small Cap or generate 57.45% 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. Mainstay Epoch Small
Performance |
| Timeline |
| Kinetics Small Cap |
| Mainstay Epoch Small |
Kinetics Small and Mainstay Epoch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Mainstay Epoch
The main advantage of trading using opposite Kinetics Small and Mainstay Epoch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Mainstay Epoch 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 Mainstay Epoch will offset losses from the drop in Mainstay Epoch'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 |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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