Correlation Between Pace International and Kinetics Market
Can any of the company-specific risk be diversified away by investing in both Pace International and Kinetics Market 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 Pace International and Kinetics Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Kinetics Market Opportunities, you can compare the effects of market volatilities on Pace International and Kinetics Market 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 Pace International with a short position of Kinetics Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Kinetics Market.
Diversification Opportunities for Pace International and Kinetics Market
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pace and Kinetics is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Kinetics Market Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Market Oppo and Pace International 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 Pace International Emerging are associated (or correlated) with Kinetics Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Market Oppo has no effect on the direction of Pace International i.e., Pace International and Kinetics Market go up and down completely randomly.
Pair Corralation between Pace International and Kinetics Market
Assuming the 90 days horizon Pace International is expected to generate 9.22 times less return on investment than Kinetics Market. But when comparing it to its historical volatility, Pace International Emerging is 1.83 times less risky than Kinetics Market. It trades about 0.02 of its potential returns per unit of risk. Kinetics Market Opportunities is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,051 in Kinetics Market Opportunities on September 16, 2024 and sell it today you would earn a total of 3,599 from holding Kinetics Market Opportunities or generate 88.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. Kinetics Market Opportunities
Performance |
| Timeline |
| Pace International |
| Kinetics Market Oppo |
Pace International and Kinetics Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Kinetics Market
The main advantage of trading using opposite Pace International and Kinetics Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International position performs unexpectedly, Kinetics Market 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 Market will offset losses from the drop in Kinetics Market's long position.| Pace International vs. Pace Smallmedium Value | Pace International vs. Pace International Equity | Pace International vs. Pace International Equity | Pace International vs. Ubs Allocation Fund |
| Kinetics Market vs. Ep Emerging Markets | Kinetics Market vs. Dws Emerging Markets | Kinetics Market vs. Pace International Emerging | Kinetics Market vs. Pnc Emerging Markets |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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