Correlation Between Kinetics Small and Banking Fund
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Banking Fund 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 Banking Fund 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 Banking Fund Class, you can compare the effects of market volatilities on Kinetics Small and Banking Fund 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 Banking Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Banking Fund.
Diversification Opportunities for Kinetics Small and Banking Fund
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Banking is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Banking Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banking Fund Class 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 Banking Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banking Fund Class has no effect on the direction of Kinetics Small i.e., Kinetics Small and Banking Fund go up and down completely randomly.
Pair Corralation between Kinetics Small and Banking Fund
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.09 times more return on investment than Banking Fund. However, Kinetics Small is 1.09 times more volatile than Banking Fund Class. It trades about 0.4 of its potential returns per unit of risk. Banking Fund Class is currently generating about 0.16 per unit of risk. If you would invest 14,501 in Kinetics Small Cap on August 31, 2024 and sell it today you would earn a total of 8,650 from holding Kinetics Small Cap or generate 59.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Banking Fund Class
Performance |
| Timeline |
| Kinetics Small Cap |
| Banking Fund Class |
Kinetics Small and Banking Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Banking Fund
The main advantage of trading using opposite Kinetics Small and Banking Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Banking Fund 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 Banking Fund will offset losses from the drop in Banking Fund's long position.| Kinetics Small vs. Abr 7525 Volatility | Kinetics Small vs. T Rowe Price | Kinetics Small vs. Rbb Fund | Kinetics Small vs. Iaadx |
| Banking Fund vs. Goldman Sachs Emerging | Banking Fund vs. Angel Oak Multi Strategy | Banking Fund vs. Dws Emerging Markets | Banking Fund vs. Black Oak Emerging |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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