Correlation Between Kinetics Paradigm and Swan Defined
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Swan Defined 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 Swan Defined 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 Swan Defined Risk, you can compare the effects of market volatilities on Kinetics Paradigm and Swan Defined 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 Swan Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Swan Defined.
Diversification Opportunities for Kinetics Paradigm and Swan Defined
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Swan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Swan Defined go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Swan Defined
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.32 times more return on investment than Swan Defined. However, Kinetics Paradigm is 3.32 times more volatile than Swan Defined Risk. It trades about 0.28 of its potential returns per unit of risk. Swan Defined Risk is currently generating about 0.11 per unit of risk. If you would invest 8,414 in Kinetics Paradigm Fund on August 30, 2024 and sell it today you would earn a total of 10,205 from holding Kinetics Paradigm Fund or generate 121.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Swan Defined Risk
Performance |
| Timeline |
| Kinetics Paradigm |
| Swan Defined Risk |
Kinetics Paradigm and Swan Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Swan Defined
The main advantage of trading using opposite Kinetics Paradigm and Swan Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Swan Defined 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 Swan Defined will offset losses from the drop in Swan Defined'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 |
| Swan Defined vs. Eip Growth And | Swan Defined vs. Touchstone Small Cap | Swan Defined vs. Qs Small Capitalization | Swan Defined vs. Tfa Alphagen Growth |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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