Correlation Between Kinetics Paradigm and Northern Global
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Northern Global 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 Northern Global 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 Northern Global Real, you can compare the effects of market volatilities on Kinetics Paradigm and Northern Global 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 Northern Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Northern Global.
Diversification Opportunities for Kinetics Paradigm and Northern Global
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and Northern is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Northern Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Real 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 Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Real has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Northern Global go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Northern Global
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 2.23 times more return on investment than Northern Global. However, Kinetics Paradigm is 2.23 times more volatile than Northern Global Real. It trades about 0.17 of its potential returns per unit of risk. Northern Global Real is currently generating about 0.1 per unit of risk. If you would invest 7,955 in Kinetics Paradigm Fund on September 1, 2024 and sell it today you would earn a total of 10,330 from holding Kinetics Paradigm Fund or generate 129.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Northern Global Real
Performance |
| Timeline |
| Kinetics Paradigm |
| Northern Global Real |
Kinetics Paradigm and Northern Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Northern Global
The main advantage of trading using opposite Kinetics Paradigm and Northern Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Northern Global 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 Northern Global will offset losses from the drop in Northern Global'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 |
| Northern Global vs. Northern Bond Index | Northern Global vs. Northern Arizona Tax Exempt | Northern Global vs. Northern Emerging Markets | Northern Global vs. Northern Fixed 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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