Correlation Between Mainstay High and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Mainstay High and Kinetics Small 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 Mainstay High and Kinetics Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay High Yield and Kinetics Small Cap, you can compare the effects of market volatilities on Mainstay High and Kinetics Small 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 Mainstay High with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay High and Kinetics Small.
Diversification Opportunities for Mainstay High and Kinetics Small
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Kinetics is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay High Yield and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and Mainstay High 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 Mainstay High Yield are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Mainstay High i.e., Mainstay High and Kinetics Small go up and down completely randomly.
Pair Corralation between Mainstay High and Kinetics Small
Assuming the 90 days horizon Mainstay High is expected to generate 37.41 times less return on investment than Kinetics Small. But when comparing it to its historical volatility, Mainstay High Yield is 15.49 times less risky than Kinetics Small. It trades about 0.15 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 18,064 in Kinetics Small Cap on September 2, 2024 and sell it today you would earn a total of 4,157 from holding Kinetics Small Cap or generate 23.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay High Yield vs. Kinetics Small Cap
Performance |
| Timeline |
| Mainstay High Yield |
| Kinetics Small Cap |
Mainstay High and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay High and Kinetics Small
The main advantage of trading using opposite Mainstay High and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay High position performs unexpectedly, Kinetics Small 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 Small will offset losses from the drop in Kinetics Small's long position.| Mainstay High vs. Ultra Short Fixed Income | Mainstay High vs. Franklin Federal Limited Term | Mainstay High vs. Aqr Sustainable Long Short | Mainstay High vs. Quantitative Longshort Equity |
| Kinetics Small vs. Kinetics Paradigm Fund | Kinetics Small vs. Kinetics Market Opportunities | Kinetics Small vs. Pear Tree Polaris | Kinetics Small vs. Amg Managers Loomis |
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.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |