Correlation Between Pace Smallmedium and Kinetics Global
Can any of the company-specific risk be diversified away by investing in both Pace Smallmedium 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 Pace Smallmedium and Kinetics Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Smallmedium Value and Kinetics Global Fund, you can compare the effects of market volatilities on Pace Smallmedium 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 Pace Smallmedium with a short position of Kinetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Smallmedium and Kinetics Global.
Diversification Opportunities for Pace Smallmedium and Kinetics Global
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pace and Kinetics is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Pace Smallmedium Value and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global and Pace Smallmedium 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 Smallmedium Value 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 Pace Smallmedium i.e., Pace Smallmedium and Kinetics Global go up and down completely randomly.
Pair Corralation between Pace Smallmedium and Kinetics Global
Assuming the 90 days horizon Pace Smallmedium is expected to generate 1.26 times less return on investment than Kinetics Global. But when comparing it to its historical volatility, Pace Smallmedium Value is 2.38 times less risky than Kinetics Global. It trades about 0.04 of its potential returns per unit of risk. Kinetics Global Fund is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,536 in Kinetics Global Fund on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Kinetics Global Fund or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Smallmedium Value vs. Kinetics Global Fund
Performance |
| Timeline |
| Pace Smallmedium Value |
| Kinetics Global |
Pace Smallmedium and Kinetics Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Smallmedium and Kinetics Global
The main advantage of trading using opposite Pace Smallmedium and Kinetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Smallmedium 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.| Pace Smallmedium vs. Blackrock Health Sciences | Pace Smallmedium vs. Alger Health Sciences | Pace Smallmedium vs. Alphacentric Lifesci Healthcare | Pace Smallmedium vs. Live Oak Health |
| Kinetics Global vs. Lord Abbett Short | Kinetics Global vs. Easterly Snow Longshort | Kinetics Global vs. Boston Partners Longshort | Kinetics Global vs. Blackrock Short Term Inflat Protected |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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