Correlation Between Kinetics Paradigm and Locorr Hedged
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Locorr Hedged 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 Locorr Hedged 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 Locorr Hedged Core, you can compare the effects of market volatilities on Kinetics Paradigm and Locorr Hedged 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 Locorr Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Locorr Hedged.
Diversification Opportunities for Kinetics Paradigm and Locorr Hedged
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Locorr is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Locorr Hedged Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Hedged Core 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 Locorr Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Hedged Core has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Locorr Hedged go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Locorr Hedged
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 5.56 times more return on investment than Locorr Hedged. However, Kinetics Paradigm is 5.56 times more volatile than Locorr Hedged Core. It trades about 0.11 of its potential returns per unit of risk. Locorr Hedged Core is currently generating about -0.13 per unit of risk. If you would invest 8,192 in Kinetics Paradigm Fund on September 1, 2024 and sell it today you would earn a total of 10,093 from holding Kinetics Paradigm Fund or generate 123.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 21.54% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Locorr Hedged Core
Performance |
| Timeline |
| Kinetics Paradigm |
| Locorr Hedged Core |
Kinetics Paradigm and Locorr Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Locorr Hedged
The main advantage of trading using opposite Kinetics Paradigm and Locorr Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Locorr Hedged 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 Locorr Hedged will offset losses from the drop in Locorr Hedged'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 |
| Locorr Hedged vs. Vanguard 500 Index | Locorr Hedged vs. Ridgeworth Innovative Growth | Locorr Hedged vs. Gabelli Equity Trust | Locorr Hedged vs. Loomis Sayles International |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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