Correlation Between Kinetics Paradigm and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Nebraska Municipal 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 Nebraska Municipal 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 Nebraska Municipal Fund, you can compare the effects of market volatilities on Kinetics Paradigm and Nebraska Municipal 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 Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Nebraska Municipal.
Diversification Opportunities for Kinetics Paradigm and Nebraska Municipal
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinetics and Nebraska is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal 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 Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Nebraska Municipal
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 8.21 times more return on investment than Nebraska Municipal. However, Kinetics Paradigm is 8.21 times more volatile than Nebraska Municipal Fund. It trades about 0.08 of its potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.03 per unit of risk. If you would invest 7,814 in Kinetics Paradigm Fund on November 27, 2024 and sell it today you would earn a total of 7,233 from holding Kinetics Paradigm Fund or generate 92.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Nebraska Municipal Fund
Performance |
| Timeline |
| Kinetics Paradigm |
| Nebraska Municipal |
Kinetics Paradigm and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Nebraska Municipal
The main advantage of trading using opposite Kinetics Paradigm and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Nebraska Municipal 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal'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 |
| Nebraska Municipal vs. Aqr Managed Futures | Nebraska Municipal vs. The Hartford Inflation | Nebraska Municipal vs. Ab Bond Inflation | Nebraska Municipal vs. The Hartford Inflation |
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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