Correlation Between Kinetics Paradigm and Alger Smallcap
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Alger Smallcap 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 Alger Smallcap 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 Alger Smallcap Growth, you can compare the effects of market volatilities on Kinetics Paradigm and Alger Smallcap 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 Alger Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Alger Smallcap.
Diversification Opportunities for Kinetics Paradigm and Alger Smallcap
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Alger is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Alger Smallcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Smallcap Growth 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 Alger Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Smallcap Growth has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Alger Smallcap go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Alger Smallcap
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.59 times more return on investment than Alger Smallcap. However, Kinetics Paradigm is 1.59 times more volatile than Alger Smallcap Growth. It trades about 0.2 of its potential returns per unit of risk. Alger Smallcap Growth is currently generating about 0.12 per unit of risk. If you would invest 14,071 in Kinetics Paradigm Fund on November 3, 2024 and sell it today you would earn a total of 1,125 from holding Kinetics Paradigm Fund or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Alger Smallcap Growth
Performance |
| Timeline |
| Kinetics Paradigm |
| Alger Smallcap Growth |
Kinetics Paradigm and Alger Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Alger Smallcap
The main advantage of trading using opposite Kinetics Paradigm and Alger Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Alger Smallcap 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 Alger Smallcap will offset losses from the drop in Alger Smallcap'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 |
| Alger Smallcap vs. Western Asset Short | Alger Smallcap vs. Eagle Mlp Strategy | Alger Smallcap vs. Barings Active Short | Alger Smallcap vs. Aqr Sustainable Long Short |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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