Correlation Between Kinetics Paradigm and Polen International
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Polen International 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 Polen International 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 Polen International Small, you can compare the effects of market volatilities on Kinetics Paradigm and Polen International 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 Polen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Polen International.
Diversification Opportunities for Kinetics Paradigm and Polen International
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Polen is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Polen International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen International Small 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 Polen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen International Small has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Polen International go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Polen International
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.7 times more return on investment than Polen International. However, Kinetics Paradigm is 1.7 times more volatile than Polen International Small. It trades about 0.09 of its potential returns per unit of risk. Polen International Small is currently generating about -0.01 per unit of risk. If you would invest 8,756 in Kinetics Paradigm Fund on September 3, 2024 and sell it today you would earn a total of 8,639 from holding Kinetics Paradigm Fund or generate 98.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 27.37% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Polen International Small
Performance |
| Timeline |
| Kinetics Paradigm |
| Polen International Small |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinetics Paradigm and Polen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Polen International
The main advantage of trading using opposite Kinetics Paradigm and Polen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Polen International 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 Polen International will offset losses from the drop in Polen International'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 |
| Polen International vs. Polen International Growth | Polen International vs. Polen Bank Loan | Polen International vs. Polen Smid | Polen International vs. Polen Small Pany |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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