Correlation Between Via Renewables and Kinetics Paradigm
Can any of the company-specific risk be diversified away by investing in both Via Renewables and Kinetics Paradigm 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 Via Renewables and Kinetics Paradigm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Renewables and Kinetics Paradigm Fund, you can compare the effects of market volatilities on Via Renewables and Kinetics Paradigm 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 Via Renewables with a short position of Kinetics Paradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and Kinetics Paradigm.
Diversification Opportunities for Via Renewables and Kinetics Paradigm
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Via and Kinetics is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm and Via Renewables 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 Via Renewables are associated (or correlated) with Kinetics Paradigm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Paradigm has no effect on the direction of Via Renewables i.e., Via Renewables and Kinetics Paradigm go up and down completely randomly.
Pair Corralation between Via Renewables and Kinetics Paradigm
Assuming the 90 days horizon Via Renewables is expected to under-perform the Kinetics Paradigm. But the preferred stock apears to be less risky and, when comparing its historical volatility, Via Renewables is 2.15 times less risky than Kinetics Paradigm. The preferred stock trades about -0.04 of its potential returns per unit of risk. The Kinetics Paradigm Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 14,400 in Kinetics Paradigm Fund on November 4, 2024 and sell it today you would earn a total of 796.00 from holding Kinetics Paradigm Fund or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Via Renewables vs. Kinetics Paradigm Fund
Performance |
| Timeline |
| Via Renewables |
| Kinetics Paradigm |
Via Renewables and Kinetics Paradigm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Via Renewables and Kinetics Paradigm
The main advantage of trading using opposite Via Renewables and Kinetics Paradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables position performs unexpectedly, Kinetics Paradigm 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 Paradigm will offset losses from the drop in Kinetics Paradigm's long position.| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
| Kinetics Paradigm vs. Kinetics Small Cap | Kinetics Paradigm vs. Marsico 21st Century | Kinetics Paradigm vs. Royce Smaller Companies Growth | Kinetics Paradigm vs. Hodges Fund Retail |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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