Correlation Between Kinetics Small and Fidelity Contrafund
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Fidelity Contrafund 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 Fidelity Contrafund 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 Fidelity Trafund Class, you can compare the effects of market volatilities on Kinetics Small and Fidelity Contrafund 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 Fidelity Contrafund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Fidelity Contrafund.
Diversification Opportunities for Kinetics Small and Fidelity Contrafund
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Fidelity Trafund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Trafund Class 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 Fidelity Contrafund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Trafund Class has no effect on the direction of Kinetics Small i.e., Kinetics Small and Fidelity Contrafund go up and down completely randomly.
Pair Corralation between Kinetics Small and Fidelity Contrafund
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 3.22 times more return on investment than Fidelity Contrafund. However, Kinetics Small is 3.22 times more volatile than Fidelity Trafund Class. It trades about 0.4 of its potential returns per unit of risk. Fidelity Trafund Class is currently generating about 0.26 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 Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kinetics Small Cap vs. Fidelity Trafund Class
Performance |
| Timeline |
| Kinetics Small Cap |
| Fidelity Trafund Class |
Kinetics Small and Fidelity Contrafund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Fidelity Contrafund
The main advantage of trading using opposite Kinetics Small and Fidelity Contrafund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Fidelity Contrafund 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 Fidelity Contrafund will offset losses from the drop in Fidelity Contrafund'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 |
| Fidelity Contrafund vs. T Rowe Price | Fidelity Contrafund vs. Legg Mason Partners | Fidelity Contrafund vs. Kinetics Small Cap | Fidelity Contrafund vs. Jpmorgan Small Cap |
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 CEOs Directory module to screen CEOs from public companies around the world.
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