Correlation Between Growth Fund and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Kinetics Small 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 Growth Fund and Kinetics Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Kinetics Small Cap, you can compare the effects of market volatilities on Growth Fund and Kinetics Small 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 Growth Fund with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Kinetics Small.
Diversification Opportunities for Growth Fund and Kinetics Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GROWTH and Kinetics is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and Growth Fund 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 Growth Fund Of are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Growth Fund i.e., Growth Fund and Kinetics Small go up and down completely randomly.
Pair Corralation between Growth Fund and Kinetics Small
Assuming the 90 days horizon Growth Fund is expected to generate 4.62 times less return on investment than Kinetics Small. But when comparing it to its historical volatility, Growth Fund Of is 1.94 times less risky than Kinetics Small. It trades about 0.12 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 11,924 in Kinetics Small Cap on August 29, 2024 and sell it today you would earn a total of 11,227 from holding Kinetics Small Cap or generate 94.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Kinetics Small Cap
Performance |
| Timeline |
| Growth Fund |
| Kinetics Small Cap |
Growth Fund and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Kinetics Small
The main advantage of trading using opposite Growth Fund and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Kinetics Small 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 Small will offset losses from the drop in Kinetics Small's long position.| Growth Fund vs. Growth Fund Of | Growth Fund vs. HUMANA INC | Growth Fund vs. Aquagold International | Growth Fund vs. Barloworld Ltd ADR |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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