Correlation Between Kinetics Small and Invesco Senior
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Invesco Senior 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 Invesco Senior 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 Invesco Senior Income, you can compare the effects of market volatilities on Kinetics Small and Invesco Senior 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 Invesco Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Invesco Senior.
Diversification Opportunities for Kinetics Small and Invesco Senior
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and Invesco is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Invesco Senior Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Senior Income 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 Invesco Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Senior Income has no effect on the direction of Kinetics Small i.e., Kinetics Small and Invesco Senior go up and down completely randomly.
Pair Corralation between Kinetics Small and Invesco Senior
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.99 times more return on investment than Invesco Senior. However, Kinetics Small is 1.99 times more volatile than Invesco Senior Income. It trades about 0.19 of its potential returns per unit of risk. Invesco Senior Income is currently generating about 0.05 per unit of risk. If you would invest 10,898 in Kinetics Small Cap on September 2, 2024 and sell it today you would earn a total of 11,900 from holding Kinetics Small Cap or generate 109.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Invesco Senior Income
Performance |
| Timeline |
| Kinetics Small Cap |
| Invesco Senior Income |
Kinetics Small and Invesco Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Invesco Senior
The main advantage of trading using opposite Kinetics Small and Invesco Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Invesco Senior 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 Invesco Senior will offset losses from the drop in Invesco Senior's long position.| Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Market Opportunities | Kinetics Small vs. Pear Tree Polaris | Kinetics Small vs. Amg Managers Loomis |
| Invesco Senior vs. Nuveen Floating Rate | Invesco Senior vs. Blackrock Muni Intermediate | Invesco Senior vs. Eaton Vance Senior | Invesco Senior vs. BlackRock Floating Rate |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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