Correlation Between Kinetics Paradigm and International Equity
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and International Equity 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 International Equity 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 International Equity Fund, you can compare the effects of market volatilities on Kinetics Paradigm and International Equity 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 International Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and International Equity.
Diversification Opportunities for Kinetics Paradigm and International Equity
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kinetics and International is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and International Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity 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 International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and International Equity go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and International Equity
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.97 times more return on investment than International Equity. However, Kinetics Paradigm is 3.97 times more volatile than International Equity Fund. It trades about 0.38 of its potential returns per unit of risk. International Equity Fund is currently generating about -0.07 per unit of risk. If you would invest 14,214 in Kinetics Paradigm Fund on September 3, 2024 and sell it today you would earn a total of 4,071 from holding Kinetics Paradigm Fund or generate 28.64% 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. International Equity Fund
Performance |
| Timeline |
| Kinetics Paradigm |
| International Equity |
Kinetics Paradigm and International Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and International Equity
The main advantage of trading using opposite Kinetics Paradigm and International Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, International Equity 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 International Equity will offset losses from the drop in International Equity'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 |
| International Equity vs. Touchstone Premium Yield | International Equity vs. Transamerica Funds | International Equity vs. Artisan High Income | International Equity vs. Bbh Intermediate Municipal |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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