Correlation Between Kinetics Small and Pimco Trends
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Pimco Trends 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 Pimco Trends 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 Pimco Trends Managed, you can compare the effects of market volatilities on Kinetics Small and Pimco Trends 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 Pimco Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Pimco Trends.
Diversification Opportunities for Kinetics Small and Pimco Trends
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Pimco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Pimco Trends Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Trends Managed 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 Pimco Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Trends Managed has no effect on the direction of Kinetics Small i.e., Kinetics Small and Pimco Trends go up and down completely randomly.
Pair Corralation between Kinetics Small and Pimco Trends
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 3.32 times more return on investment than Pimco Trends. However, Kinetics Small is 3.32 times more volatile than Pimco Trends Managed. It trades about 0.34 of its potential returns per unit of risk. Pimco Trends Managed is currently generating about -0.02 per unit of risk. If you would invest 14,415 in Kinetics Small Cap on September 4, 2024 and sell it today you would earn a total of 7,463 from holding Kinetics Small Cap or generate 51.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Kinetics Small Cap vs. Pimco Trends Managed
Performance |
| Timeline |
| Kinetics Small Cap |
| Pimco Trends Managed |
Kinetics Small and Pimco Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Pimco Trends
The main advantage of trading using opposite Kinetics Small and Pimco Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Pimco Trends 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 Pimco Trends will offset losses from the drop in Pimco Trends' 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 |
| Pimco Trends vs. Small Midcap Dividend Income | Pimco Trends vs. Fisher Small Cap | Pimco Trends vs. Qs Small Capitalization | Pimco Trends vs. Kinetics 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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