Correlation Between Kinetics Small and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Old Westbury 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 Old Westbury 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 Old Westbury Credit, you can compare the effects of market volatilities on Kinetics Small and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Old Westbury.
Diversification Opportunities for Kinetics Small and Old Westbury
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and Old is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Old Westbury Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Credit 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Credit has no effect on the direction of Kinetics Small i.e., Kinetics Small and Old Westbury go up and down completely randomly.
Pair Corralation between Kinetics Small and Old Westbury
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 5.59 times more return on investment than Old Westbury. However, Kinetics Small is 5.59 times more volatile than Old Westbury Credit. It trades about 0.26 of its potential returns per unit of risk. Old Westbury Credit is currently generating about 0.09 per unit of risk. If you would invest 11,755 in Kinetics Small Cap on September 4, 2024 and sell it today you would earn a total of 10,737 from holding Kinetics Small Cap or generate 91.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Old Westbury Credit
Performance |
| Timeline |
| Kinetics Small Cap |
| Old Westbury Credit |
Kinetics Small and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Old Westbury
The main advantage of trading using opposite Kinetics Small and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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