Correlation Between M Large and Kinetics Global
Can any of the company-specific risk be diversified away by investing in both M Large 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 M Large and Kinetics Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Large Cap and Kinetics Global Fund, you can compare the effects of market volatilities on M Large 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 M Large with a short position of Kinetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and Kinetics Global.
Diversification Opportunities for M Large and Kinetics Global
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MTCGX and Kinetics is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global and M Large 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 M Large Cap 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 M Large i.e., M Large and Kinetics Global go up and down completely randomly.
Pair Corralation between M Large and Kinetics Global
Assuming the 90 days horizon M Large is expected to generate 3.99 times less return on investment than Kinetics Global. But when comparing it to its historical volatility, M Large Cap is 1.79 times less risky than Kinetics Global. It trades about 0.22 of its potential returns per unit of risk. Kinetics Global Fund is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,468 in Kinetics Global Fund on September 1, 2024 and sell it today you would earn a total of 325.00 from holding Kinetics Global Fund or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
M Large Cap vs. Kinetics Global Fund
Performance |
| Timeline |
| M Large Cap |
| Kinetics Global |
M Large and Kinetics Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Large and Kinetics Global
The main advantage of trading using opposite M Large and Kinetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Large 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.| M Large vs. Government Securities Fund | M Large vs. Inverse Government Long | M Large vs. Dws Government Money | M Large vs. Dreyfus Government Cash |
| Kinetics Global vs. Kinetics Global Fund | Kinetics Global vs. Kinetics Paradigm Fund | Kinetics Global vs. Kinetics Internet Fund | Kinetics Global vs. Kinetics Global Fund |
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.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |