Correlation Between Kinetics Small and Inverse Sp
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Inverse Sp 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 Inverse Sp 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 Inverse Sp 500, you can compare the effects of market volatilities on Kinetics Small and Inverse Sp 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 Inverse Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Inverse Sp.
Diversification Opportunities for Kinetics Small and Inverse Sp
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kinetics and Inverse is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Inverse Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Sp 500 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 Inverse Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Sp 500 has no effect on the direction of Kinetics Small i.e., Kinetics Small and Inverse Sp go up and down completely randomly.
Pair Corralation between Kinetics Small and Inverse Sp
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 2.16 times more return on investment than Inverse Sp. However, Kinetics Small is 2.16 times more volatile than Inverse Sp 500. It trades about 0.17 of its potential returns per unit of risk. Inverse Sp 500 is currently generating about -0.1 per unit of risk. If you would invest 11,003 in Kinetics Small Cap on September 3, 2024 and sell it today you would earn a total of 10,875 from holding Kinetics Small Cap or generate 98.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Inverse Sp 500
Performance |
| Timeline |
| Kinetics Small Cap |
| Inverse Sp 500 |
Kinetics Small and Inverse Sp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Inverse Sp
The main advantage of trading using opposite Kinetics Small and Inverse Sp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Inverse Sp 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 Inverse Sp will offset losses from the drop in Inverse Sp's 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 |
| Inverse Sp vs. Inverse Nasdaq 100 Strategy | Inverse Sp vs. Inverse Nasdaq 100 Strategy | Inverse Sp vs. Inverse Nasdaq 100 Strategy | Inverse Sp vs. Inverse Russell 2000 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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