Correlation Between Kinetics Small and Aquila Narragansett
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Aquila Narragansett 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 Aquila Narragansett 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 Aquila Narragansett Tax Free, you can compare the effects of market volatilities on Kinetics Small and Aquila Narragansett 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 Aquila Narragansett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Aquila Narragansett.
Diversification Opportunities for Kinetics Small and Aquila Narragansett
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinetics and Aquila is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Aquila Narragansett Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Narragansett Tax 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 Aquila Narragansett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Narragansett Tax has no effect on the direction of Kinetics Small i.e., Kinetics Small and Aquila Narragansett go up and down completely randomly.
Pair Corralation between Kinetics Small and Aquila Narragansett
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 11.65 times more return on investment than Aquila Narragansett. However, Kinetics Small is 11.65 times more volatile than Aquila Narragansett Tax Free. It trades about 0.12 of its potential returns per unit of risk. Aquila Narragansett Tax Free is currently generating about 0.11 per unit of risk. If you would invest 11,164 in Kinetics Small Cap on September 14, 2024 and sell it today you would earn a total of 7,814 from holding Kinetics Small Cap or generate 69.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 62.31% |
| Values | Daily Returns |
Kinetics Small Cap vs. Aquila Narragansett Tax Free
Performance |
| Timeline |
| Kinetics Small Cap |
| Aquila Narragansett Tax |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinetics Small and Aquila Narragansett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Aquila Narragansett
The main advantage of trading using opposite Kinetics Small and Aquila Narragansett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Aquila Narragansett 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 Aquila Narragansett will offset losses from the drop in Aquila Narragansett's long position.| Kinetics Small vs. Allianzgi Technology Fund | Kinetics Small vs. Dreyfus Technology Growth | Kinetics Small vs. Pgim Jennison Technology | Kinetics Small vs. Mfs Technology Fund |
| Aquila Narragansett vs. Mutual Of America | Aquila Narragansett vs. Scout Small Cap | Aquila Narragansett vs. Kinetics Small Cap | Aquila Narragansett vs. Ab Small Cap |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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