Correlation Between Kinetics Small and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Pacific Funds 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 Pacific Funds 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 Pacific Funds Short, you can compare the effects of market volatilities on Kinetics Small and Pacific Funds 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 Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Pacific Funds.
Diversification Opportunities for Kinetics Small and Pacific Funds
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Pacific is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Pacific Funds Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Short 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Short has no effect on the direction of Kinetics Small i.e., Kinetics Small and Pacific Funds go up and down completely randomly.
Pair Corralation between Kinetics Small and Pacific Funds
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 17.66 times more return on investment than Pacific Funds. However, Kinetics Small is 17.66 times more volatile than Pacific Funds Short. It trades about 0.25 of its potential returns per unit of risk. Pacific Funds Short is currently generating about 0.2 per unit of risk. If you would invest 11,781 in Kinetics Small Cap on September 3, 2024 and sell it today you would earn a total of 10,097 from holding Kinetics Small Cap or generate 85.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Pacific Funds Short
Performance |
| Timeline |
| Kinetics Small Cap |
| Pacific Funds Short |
Kinetics Small and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Pacific Funds
The main advantage of trading using opposite Kinetics Small and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.| Kinetics Small vs. General Money Market | Kinetics Small vs. Matson Money Equity | Kinetics Small vs. Ashmore Emerging Markets | Kinetics Small vs. Aig Government Money |
| Pacific Funds vs. California Bond Fund | Pacific Funds vs. Ambrus Core Bond | Pacific Funds vs. Blrc Sgy Mnp | Pacific Funds vs. Ms Global Fixed |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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