Correlation Between Western Asset and Kinetics Paradigm
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Kinetics Paradigm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Kinetics Paradigm Fund, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Kinetics Paradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Kinetics Paradigm.
Diversification Opportunities for Western Asset and Kinetics Paradigm
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WESTERN and Kinetics is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm and Western Asset 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 Western Asset Inflation 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 Western Asset i.e., Western Asset and Kinetics Paradigm go up and down completely randomly.
Pair Corralation between Western Asset and Kinetics Paradigm
Assuming the 90 days horizon Western Asset is expected to generate 23.63 times less return on investment than Kinetics Paradigm. But when comparing it to its historical volatility, Western Asset Inflation is 5.56 times less risky than Kinetics Paradigm. It trades about 0.05 of its potential returns per unit of risk. Kinetics Paradigm Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 7,852 in Kinetics Paradigm Fund on August 25, 2024 and sell it today you would earn a total of 11,844 from holding Kinetics Paradigm Fund or generate 150.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Kinetics Paradigm Fund
Performance |
| Timeline |
| Western Asset Inflation |
| Kinetics Paradigm |
Western Asset and Kinetics Paradigm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Kinetics Paradigm
The main advantage of trading using opposite Western Asset and Kinetics Paradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Ocm Mutual Fund | Western Asset vs. Short Precious Metals | Western Asset vs. Gabelli Gold Fund | Western Asset vs. Gold And Precious |
| Kinetics Paradigm vs. Western Asset Inflation | Kinetics Paradigm vs. Ab Bond Inflation | Kinetics Paradigm vs. Ab Bond Inflation | Kinetics Paradigm vs. Vy Blackrock Inflation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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