Correlation Between Kinetics Small and Siit Small
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Siit Small 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 Siit Small 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 Siit Small Mid, you can compare the effects of market volatilities on Kinetics Small and Siit Small 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 Siit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Siit Small.
Diversification Opportunities for Kinetics Small and Siit Small
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Siit is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Siit Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Small Mid 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 Siit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Small Mid has no effect on the direction of Kinetics Small i.e., Kinetics Small and Siit Small go up and down completely randomly.
Pair Corralation between Kinetics Small and Siit Small
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.88 times more return on investment than Siit Small. However, Kinetics Small is 1.88 times more volatile than Siit Small Mid. It trades about 0.45 of its potential returns per unit of risk. Siit Small Mid is currently generating about 0.18 per unit of risk. If you would invest 17,905 in Kinetics Small Cap on October 21, 2024 and sell it today you would earn a total of 2,428 from holding Kinetics Small Cap or generate 13.56% 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. Siit Small Mid
Performance |
| Timeline |
| Kinetics Small Cap |
| Siit Small Mid |
Kinetics Small and Siit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Siit Small
The main advantage of trading using opposite Kinetics Small and Siit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Siit Small 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 Siit Small will offset losses from the drop in Siit Small's long position.| Kinetics Small vs. Georgia Tax Free Bond | Kinetics Small vs. Artisan High Income | Kinetics Small vs. Morningstar Defensive Bond | Kinetics Small vs. Dreyfusstandish Global Fixed |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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