Correlation Between High Yield and Kinetics Global
Can any of the company-specific risk be diversified away by investing in both High Yield 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 High Yield and Kinetics Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Bond and Kinetics Global Fund, you can compare the effects of market volatilities on High Yield 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 High Yield with a short position of Kinetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Kinetics Global.
Diversification Opportunities for High Yield and Kinetics Global
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between High and Kinetics is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Bond and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global and High Yield 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 High Yield Bond 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 High Yield i.e., High Yield and Kinetics Global go up and down completely randomly.
Pair Corralation between High Yield and Kinetics Global
Assuming the 90 days horizon High Yield is expected to generate 8.12 times less return on investment than Kinetics Global. But when comparing it to its historical volatility, High Yield Bond is 10.7 times less risky than Kinetics Global. It trades about 0.06 of its potential returns per unit of risk. Kinetics Global Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,523 in Kinetics Global Fund on September 12, 2024 and sell it today you would earn a total of 21.00 from holding Kinetics Global Fund or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
High Yield Bond vs. Kinetics Global Fund
Performance |
| Timeline |
| High Yield Bond |
| Kinetics Global |
High Yield and Kinetics Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Kinetics Global
The main advantage of trading using opposite High Yield and Kinetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield 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.| High Yield vs. Kinetics Global Fund | High Yield vs. Ab Global Risk | High Yield vs. Jhancock Global Equity | High Yield vs. Ab Global Risk |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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