Correlation Between Kinetics Paradigm and Meridian Growth
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Meridian Growth 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 Meridian Growth 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 Meridian Growth Fund, you can compare the effects of market volatilities on Kinetics Paradigm and Meridian Growth 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 Meridian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Meridian Growth.
Diversification Opportunities for Kinetics Paradigm and Meridian Growth
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Meridian is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Meridian Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian 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 Meridian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Growth has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Meridian Growth go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Meridian Growth
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 2.81 times more return on investment than Meridian Growth. However, Kinetics Paradigm is 2.81 times more volatile than Meridian Growth Fund. It trades about 0.41 of its potential returns per unit of risk. Meridian Growth Fund is currently generating about 0.34 per unit of risk. If you would invest 13,896 in Kinetics Paradigm Fund on September 1, 2024 and sell it today you would earn a total of 4,389 from holding Kinetics Paradigm Fund or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Meridian Growth Fund
Performance |
| Timeline |
| Kinetics Paradigm |
| Meridian Growth |
Kinetics Paradigm and Meridian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Meridian Growth
The main advantage of trading using opposite Kinetics Paradigm and Meridian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Meridian Growth 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 Meridian Growth will offset losses from the drop in Meridian Growth'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 |
| Meridian Growth vs. Meridian Equity Income | Meridian Growth vs. Meridian Equity Income | Meridian Growth vs. Meridian Growth Fund | Meridian Growth vs. Meridian Equity Income |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |