Correlation Between Kinetics Small and Bny Mellon
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Bny Mellon 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 Bny Mellon 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 Bny Mellon Porate, you can compare the effects of market volatilities on Kinetics Small and Bny Mellon 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 Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Bny Mellon.
Diversification Opportunities for Kinetics Small and Bny Mellon
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and Bny is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Bny Mellon Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Porate 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 Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Porate has no effect on the direction of Kinetics Small i.e., Kinetics Small and Bny Mellon go up and down completely randomly.
Pair Corralation between Kinetics Small and Bny Mellon
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 9.98 times more return on investment than Bny Mellon. However, Kinetics Small is 9.98 times more volatile than Bny Mellon Porate. It trades about 0.4 of its potential returns per unit of risk. Bny Mellon Porate is currently generating about 0.13 per unit of risk. If you would invest 16,134 in Kinetics Small Cap on September 1, 2024 and sell it today you would earn a total of 4,056 from holding Kinetics Small Cap or generate 25.14% 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. Bny Mellon Porate
Performance |
| Timeline |
| Kinetics Small Cap |
| Bny Mellon Porate |
Kinetics Small and Bny Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Bny Mellon
The main advantage of trading using opposite Kinetics Small and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Bny Mellon 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 Bny Mellon will offset losses from the drop in Bny Mellon's long position.| Kinetics Small vs. Kinetics Global Fund | Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Internet Fund | Kinetics Small vs. Kinetics Global Fund |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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