Correlation Between Pacific Funds and Kinetics Global
Can any of the company-specific risk be diversified away by investing in both Pacific Funds 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 Pacific Funds and Kinetics Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Funds Portfolio and Kinetics Global Fund, you can compare the effects of market volatilities on Pacific Funds 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 Pacific Funds with a short position of Kinetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Funds and Kinetics Global.
Diversification Opportunities for Pacific Funds and Kinetics Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pacific and Kinetics is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Funds Portfolio and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global and Pacific Funds 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 Pacific Funds Portfolio 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 Pacific Funds i.e., Pacific Funds and Kinetics Global go up and down completely randomly.
Pair Corralation between Pacific Funds and Kinetics Global
Assuming the 90 days horizon Pacific Funds is expected to generate 4.24 times less return on investment than Kinetics Global. But when comparing it to its historical volatility, Pacific Funds Portfolio is 3.17 times less risky than Kinetics Global. It trades about 0.12 of its potential returns per unit of risk. Kinetics Global Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 871.00 in Kinetics Global Fund on September 14, 2024 and sell it today you would earn a total of 660.00 from holding Kinetics Global Fund or generate 75.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Pacific Funds Portfolio vs. Kinetics Global Fund
Performance |
| Timeline |
| Pacific Funds Portfolio |
| Kinetics Global |
Pacific Funds and Kinetics Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Funds and Kinetics Global
The main advantage of trading using opposite Pacific Funds and Kinetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Funds 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.| Pacific Funds vs. Qs Large Cap | Pacific Funds vs. Guidemark Large Cap | Pacific Funds vs. Rational Strategic Allocation | Pacific Funds vs. Aqr Large Cap |
| Kinetics Global vs. Nasdaq 100 Index Fund | Kinetics Global vs. Ab Value Fund | Kinetics Global vs. Volumetric Fund Volumetric | Kinetics Global vs. Auer Growth 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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