Correlation Between Kinetics Small and Kinetics Global
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Kinetics Global 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 Kinetics Global 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 Kinetics Global Fund, you can compare the effects of market volatilities on Kinetics Small and Kinetics Global 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 Kinetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Kinetics Global.
Diversification Opportunities for Kinetics Small and Kinetics Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Kinetics is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global 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 Kinetics Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Global has no effect on the direction of Kinetics Small i.e., Kinetics Small and Kinetics Global go up and down completely randomly.
Pair Corralation between Kinetics Small and Kinetics Global
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.42 times more return on investment than Kinetics Global. However, Kinetics Small is 1.42 times more volatile than Kinetics Global Fund. It trades about 0.28 of its potential returns per unit of risk. Kinetics Global Fund is currently generating about 0.26 per unit of risk. If you would invest 16,245 in Kinetics Small Cap on November 1, 2024 and sell it today you would earn a total of 1,675 from holding Kinetics Small Cap or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Kinetics Global Fund
Performance |
| Timeline |
| Kinetics Small Cap |
| Kinetics Global |
Kinetics Small and Kinetics Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Kinetics Global
The main advantage of trading using opposite Kinetics Small and Kinetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Kinetics Global 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 Kinetics Global will offset losses from the drop in Kinetics Global's long position.| Kinetics Small vs. Short Duration Inflation | Kinetics Small vs. Ab Bond Inflation | Kinetics Small vs. Credit Suisse Multialternative | Kinetics Small vs. Tiaa Cref Inflation Linked Bond |
| Kinetics Global vs. Transamerica High Yield | Kinetics Global vs. Metropolitan West High | Kinetics Global vs. Virtus High Yield | Kinetics Global vs. Prudential High Yield |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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