Correlation Between Kinetics Paradigm and Pimco Municipal
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Pimco 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 Pimco 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 Pimco Municipal Income, you can compare the effects of market volatilities on Kinetics Paradigm and Pimco 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 Pimco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Pimco Municipal.
Diversification Opportunities for Kinetics Paradigm and Pimco Municipal
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinetics and Pimco is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Pimco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Municipal Income 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 Pimco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Municipal Income has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Pimco Municipal go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Pimco Municipal
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.5 times more return on investment than Pimco Municipal. However, Kinetics Paradigm is 3.5 times more volatile than Pimco Municipal Income. It trades about 0.44 of its potential returns per unit of risk. Pimco Municipal Income is currently generating about 0.05 per unit of risk. If you would invest 13,841 in Kinetics Paradigm Fund on August 31, 2024 and sell it today you would earn a total of 4,778 from holding Kinetics Paradigm Fund or generate 34.52% 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. Pimco Municipal Income
Performance |
| Timeline |
| Kinetics Paradigm |
| Pimco Municipal Income |
Kinetics Paradigm and Pimco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Pimco Municipal
The main advantage of trading using opposite Kinetics Paradigm and Pimco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Pimco 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 Pimco Municipal will offset losses from the drop in Pimco 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 |
| Pimco Municipal vs. Pimco Municipal Income | Pimco Municipal vs. Pimco Municipal Income | Pimco Municipal vs. Pimco California Municipal | Pimco Municipal vs. Pimco New York |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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