Correlation Between Kinetics Small and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Nationwide Growth 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 Nationwide Growth 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 Nationwide Growth Fund, you can compare the effects of market volatilities on Kinetics Small and Nationwide Growth 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 Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Nationwide Growth.
Diversification Opportunities for Kinetics Small and Nationwide Growth
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and NATIONWIDE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth 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 Nationwide Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Growth has no effect on the direction of Kinetics Small i.e., Kinetics Small and Nationwide Growth go up and down completely randomly.
Pair Corralation between Kinetics Small and Nationwide Growth
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 3.93 times more return on investment than Nationwide Growth. However, Kinetics Small is 3.93 times more volatile than Nationwide Growth Fund. It trades about 0.36 of its potential returns per unit of risk. Nationwide Growth Fund is currently generating about 0.35 per unit of risk. If you would invest 18,530 in Kinetics Small Cap on September 2, 2024 and sell it today you would earn a total of 4,268 from holding Kinetics Small Cap or generate 23.03% 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. Nationwide Growth Fund
Performance |
| Timeline |
| Kinetics Small Cap |
| Nationwide Growth |
Kinetics Small and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Nationwide Growth
The main advantage of trading using opposite Kinetics Small and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Nationwide Growth 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 Nationwide Growth will offset losses from the drop in Nationwide Growth's long position.| Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Market Opportunities | Kinetics Small vs. Pear Tree Polaris | Kinetics Small vs. Amg Managers Loomis |
| Nationwide Growth vs. Nationwide Mid Cap | Nationwide Growth vs. Nationwide Small Cap | Nationwide Growth vs. Nationwide International Index | Nationwide Growth vs. Nationwide Fund Institutional |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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