Correlation Between Kinetics Paradigm and Federated Ohio
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Federated Ohio 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 Federated Ohio 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 Federated Ohio Municipal, you can compare the effects of market volatilities on Kinetics Paradigm and Federated Ohio 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 Federated Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Federated Ohio.
Diversification Opportunities for Kinetics Paradigm and Federated Ohio
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Federated is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Federated Ohio Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ohio 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 Federated Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ohio Municipal has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Federated Ohio go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Federated Ohio
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 11.65 times more return on investment than Federated Ohio. However, Kinetics Paradigm is 11.65 times more volatile than Federated Ohio Municipal. It trades about 0.25 of its potential returns per unit of risk. Federated Ohio Municipal is currently generating about 0.13 per unit of risk. If you would invest 8,416 in Kinetics Paradigm Fund on September 3, 2024 and sell it today you would earn a total of 8,979 from holding Kinetics Paradigm Fund or generate 106.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Federated Ohio Municipal
Performance |
| Timeline |
| Kinetics Paradigm |
| Federated Ohio Municipal |
Kinetics Paradigm and Federated Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Federated Ohio
The main advantage of trading using opposite Kinetics Paradigm and Federated Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Federated Ohio 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 Federated Ohio will offset losses from the drop in Federated Ohio'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 |
| Federated Ohio vs. Gmo Resources | Federated Ohio vs. Fidelity Advisor Energy | Federated Ohio vs. Calvert Global Energy | Federated Ohio vs. Energy Basic Materials |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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