Correlation Between Kinetics Paradigm and Applied Finance
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Applied Finance 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 Kinetics Paradigm and Applied Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Paradigm Fund and Applied Finance Explorer, you can compare the effects of market volatilities on Kinetics Paradigm and Applied Finance 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 Kinetics Paradigm with a short position of Applied Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Applied Finance.
Diversification Opportunities for Kinetics Paradigm and Applied Finance
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Applied is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Applied Finance Explorer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Finance Explorer and Kinetics Paradigm 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 Kinetics Paradigm Fund are associated (or correlated) with Applied Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Finance Explorer has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Applied Finance go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Applied Finance
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.17 times more return on investment than Applied Finance. However, Kinetics Paradigm is 1.17 times more volatile than Applied Finance Explorer. It trades about 0.15 of its potential returns per unit of risk. Applied Finance Explorer is currently generating about 0.06 per unit of risk. If you would invest 6,799 in Kinetics Paradigm Fund on August 31, 2024 and sell it today you would earn a total of 11,486 from holding Kinetics Paradigm Fund or generate 168.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Applied Finance Explorer
Performance |
| Timeline |
| Kinetics Paradigm |
| Applied Finance Explorer |
Kinetics Paradigm and Applied Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Applied Finance
The main advantage of trading using opposite Kinetics Paradigm and Applied Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Applied Finance 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 Applied Finance will offset losses from the drop in Applied Finance's long position.| 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 |
| Applied Finance vs. Firsthand Alternative Energy | Applied Finance vs. Short Oil Gas | Applied Finance vs. Fidelity Advisor Energy | Applied Finance vs. Jennison Natural Resources |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |