Correlation Between Kinetics Paradigm and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Franklin Mutual 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 Franklin Mutual 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 Franklin Mutual Financial, you can compare the effects of market volatilities on Kinetics Paradigm and Franklin Mutual 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 Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Franklin Mutual.
Diversification Opportunities for Kinetics Paradigm and Franklin Mutual
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Franklin Mutual Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Financial 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 Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Financial has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Franklin Mutual go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Franklin Mutual
If you would invest 8,414 in Kinetics Paradigm Fund on September 1, 2024 and sell it today you would earn a total of 9,871 from holding Kinetics Paradigm Fund or generate 117.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Franklin Mutual Financial
Performance |
| Timeline |
| Kinetics Paradigm |
| Franklin Mutual Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinetics Paradigm and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Franklin Mutual
The main advantage of trading using opposite Kinetics Paradigm and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Franklin Mutual 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 Franklin Mutual will offset losses from the drop in Franklin Mutual'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 |
| Franklin Mutual vs. Franklin Mutual European | Franklin Mutual vs. Franklin Natural Resources | Franklin Mutual vs. Franklin Real Estate | Franklin Mutual vs. Franklin Utilities Fund |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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