Correlation Between Nebraska Municipal and Kinetics Global
Can any of the company-specific risk be diversified away by investing in both Nebraska Municipal 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 Nebraska Municipal and Kinetics Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nebraska Municipal Fund and Kinetics Global Fund, you can compare the effects of market volatilities on Nebraska Municipal 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 Nebraska Municipal with a short position of Kinetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nebraska Municipal and Kinetics Global.
Diversification Opportunities for Nebraska Municipal and Kinetics Global
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nebraska and Kinetics is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nebraska Municipal Fund and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global and Nebraska Municipal 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 Nebraska Municipal Fund 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 Nebraska Municipal i.e., Nebraska Municipal and Kinetics Global go up and down completely randomly.
Pair Corralation between Nebraska Municipal and Kinetics Global
Assuming the 90 days horizon Nebraska Municipal Fund is expected to generate 0.27 times more return on investment than Kinetics Global. However, Nebraska Municipal Fund is 3.74 times less risky than Kinetics Global. It trades about 0.07 of its potential returns per unit of risk. Kinetics Global Fund is currently generating about -0.01 per unit of risk. If you would invest 920.00 in Nebraska Municipal Fund on November 27, 2024 and sell it today you would earn a total of 3.00 from holding Nebraska Municipal Fund or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nebraska Municipal Fund vs. Kinetics Global Fund
Performance |
| Timeline |
| Nebraska Municipal |
| Kinetics Global |
Nebraska Municipal and Kinetics Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nebraska Municipal and Kinetics Global
The main advantage of trading using opposite Nebraska Municipal and Kinetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nebraska Municipal 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.| Nebraska Municipal vs. Aqr Managed Futures | Nebraska Municipal vs. The Hartford Inflation | Nebraska Municipal vs. Ab Bond Inflation | Nebraska Municipal vs. The Hartford Inflation |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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