Correlation Between Kinetics Paradigm and Catholic Responsible
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Catholic Responsible 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 Catholic Responsible 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 Catholic Responsible Investments, you can compare the effects of market volatilities on Kinetics Paradigm and Catholic Responsible 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 Catholic Responsible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Catholic Responsible.
Diversification Opportunities for Kinetics Paradigm and Catholic Responsible
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Catholic is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Catholic Responsible Investmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Responsible 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 Catholic Responsible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Responsible has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Catholic Responsible go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Catholic Responsible
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.46 times more return on investment than Catholic Responsible. However, Kinetics Paradigm is 3.46 times more volatile than Catholic Responsible Investments. It trades about 0.08 of its potential returns per unit of risk. Catholic Responsible Investments is currently generating about 0.1 per unit of risk. If you would invest 10,015 in Kinetics Paradigm Fund on September 2, 2024 and sell it today you would earn a total of 8,270 from holding Kinetics Paradigm Fund or generate 82.58% 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. Catholic Responsible Investmen
Performance |
| Timeline |
| Kinetics Paradigm |
| Catholic Responsible |
Kinetics Paradigm and Catholic Responsible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Catholic Responsible
The main advantage of trading using opposite Kinetics Paradigm and Catholic Responsible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Catholic Responsible 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 Catholic Responsible will offset losses from the drop in Catholic Responsible's long position.| Kinetics Paradigm vs. Kinetics Global Fund | Kinetics Paradigm vs. Kinetics Global Fund | Kinetics Paradigm vs. Kinetics Internet Fund | Kinetics Paradigm vs. Kinetics Global Fund |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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