Correlation Between Kinetics Paradigm and Real Estate
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Real Estate 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 Real Estate 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 Real Estate Securities, you can compare the effects of market volatilities on Kinetics Paradigm and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Real Estate.
Diversification Opportunities for Kinetics Paradigm and Real Estate
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Real is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Real Estate Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Securities 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Securities has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Real Estate go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Real Estate
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.63 times more return on investment than Real Estate. However, Kinetics Paradigm is 1.63 times more volatile than Real Estate Securities. It trades about 0.07 of its potential returns per unit of risk. Real Estate Securities is currently generating about 0.04 per unit of risk. If you would invest 10,222 in Kinetics Paradigm Fund on September 4, 2024 and sell it today you would earn a total of 7,173 from holding Kinetics Paradigm Fund or generate 70.17% 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. Real Estate Securities
Performance |
| Timeline |
| Kinetics Paradigm |
| Real Estate Securities |
Kinetics Paradigm and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Real Estate
The main advantage of trading using opposite Kinetics Paradigm and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate'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 |
| Real Estate vs. Realty Income | Real Estate vs. Dynex Capital | Real Estate vs. First Industrial Realty | Real Estate vs. Healthcare Realty Trust |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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