Correlation Between Kinetics Small and Sit Tax-free
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Sit Tax-free 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 Sit Tax-free 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 Sit Tax Free Income, you can compare the effects of market volatilities on Kinetics Small and Sit Tax-free 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 Sit Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Sit Tax-free.
Diversification Opportunities for Kinetics Small and Sit Tax-free
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinetics and Sit is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Sit Tax Free Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Tax Free 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 Sit Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Tax Free has no effect on the direction of Kinetics Small i.e., Kinetics Small and Sit Tax-free go up and down completely randomly.
Pair Corralation between Kinetics Small and Sit Tax-free
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 5.84 times more return on investment than Sit Tax-free. However, Kinetics Small is 5.84 times more volatile than Sit Tax Free Income. It trades about 0.07 of its potential returns per unit of risk. Sit Tax Free Income is currently generating about 0.09 per unit of risk. If you would invest 13,842 in Kinetics Small Cap on September 3, 2024 and sell it today you would earn a total of 8,036 from holding Kinetics Small Cap or generate 58.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Sit Tax Free Income
Performance |
| Timeline |
| Kinetics Small Cap |
| Sit Tax Free |
Kinetics Small and Sit Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Sit Tax-free
The main advantage of trading using opposite Kinetics Small and Sit Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Sit Tax-free 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 Sit Tax-free will offset losses from the drop in Sit Tax-free'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 |
| Sit Tax-free vs. Vanguard Intermediate Term Tax Exempt | Sit Tax-free vs. Vanguard Intermediate Term Tax Exempt | Sit Tax-free vs. Tax Exempt Bond | Sit Tax-free vs. Tax Exempt Bond |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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