Correlation Between Kinetics Paradigm and Kellner Merger
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Kellner Merger 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 Kellner Merger 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 Kellner Merger Fund, you can compare the effects of market volatilities on Kinetics Paradigm and Kellner Merger 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 Kellner Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Kellner Merger.
Diversification Opportunities for Kinetics Paradigm and Kellner Merger
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and Kellner is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Kellner Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellner Merger 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 Kellner Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellner Merger has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Kellner Merger go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Kellner Merger
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 5.95 times more return on investment than Kellner Merger. However, Kinetics Paradigm is 5.95 times more volatile than Kellner Merger Fund. It trades about 0.07 of its potential returns per unit of risk. Kellner Merger Fund is currently generating about 0.01 per unit of risk. If you would invest 10,190 in Kinetics Paradigm Fund on September 3, 2024 and sell it today you would earn a total of 8,095 from holding Kinetics Paradigm Fund or generate 79.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kinetics Paradigm Fund vs. Kellner Merger Fund
Performance |
Timeline |
Kinetics Paradigm |
Kellner Merger |
Kinetics Paradigm and Kellner Merger Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kinetics Paradigm and Kellner Merger
The main advantage of trading using opposite Kinetics Paradigm and Kellner Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Kellner Merger 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 Kellner Merger will offset losses from the drop in Kellner Merger'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 |
Kellner Merger vs. Massmutual Premier Diversified | Kellner Merger vs. Massmutual Select Diversified | Kellner Merger vs. Calvert Conservative Allocation | Kellner Merger vs. Western Asset Diversified |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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