Correlation Between Marsico Focus and Kinetics Paradigm
Can any of the company-specific risk be diversified away by investing in both Marsico Focus and Kinetics Paradigm 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 Marsico Focus and Kinetics Paradigm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marsico Focus Fund and Kinetics Paradigm Fund, you can compare the effects of market volatilities on Marsico Focus and Kinetics Paradigm 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 Marsico Focus with a short position of Kinetics Paradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico Focus and Kinetics Paradigm.
Diversification Opportunities for Marsico Focus and Kinetics Paradigm
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Marsico and Kinetics is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus Fund and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm and Marsico Focus 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 Marsico Focus Fund are associated (or correlated) with Kinetics Paradigm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Paradigm has no effect on the direction of Marsico Focus i.e., Marsico Focus and Kinetics Paradigm go up and down completely randomly.
Pair Corralation between Marsico Focus and Kinetics Paradigm
Assuming the 90 days horizon Marsico Focus is expected to generate 6.15 times less return on investment than Kinetics Paradigm. But when comparing it to its historical volatility, Marsico Focus Fund is 2.92 times less risky than Kinetics Paradigm. It trades about 0.19 of its potential returns per unit of risk. Kinetics Paradigm Fund is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 13,841 in Kinetics Paradigm Fund on August 31, 2024 and sell it today you would earn a total of 4,444 from holding Kinetics Paradigm Fund or generate 32.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marsico Focus Fund vs. Kinetics Paradigm Fund
Performance |
| Timeline |
| Marsico Focus |
| Kinetics Paradigm |
Marsico Focus and Kinetics Paradigm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marsico Focus and Kinetics Paradigm
The main advantage of trading using opposite Marsico Focus and Kinetics Paradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsico Focus position performs unexpectedly, Kinetics Paradigm 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 Paradigm will offset losses from the drop in Kinetics Paradigm's long position.| Marsico Focus vs. Marsico Growth Fund | Marsico Focus vs. T Rowe Price | Marsico Focus vs. Short Term Fund Administrative | Marsico Focus vs. Selected American Shares |
| Kinetics Paradigm vs. Kinetics Small Cap | Kinetics Paradigm vs. Marsico 21st Century | Kinetics Paradigm vs. Royce Smaller Companies Growth | Kinetics Paradigm vs. Hodges Fund Retail |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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