Correlation Between Kinetics Paradigm and Wcm International
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Wcm 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 Wcm 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 Wcm International Small, you can compare the effects of market volatilities on Kinetics Paradigm and Wcm 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 Wcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Wcm International.
Diversification Opportunities for Kinetics Paradigm and Wcm International
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Wcm is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Wcm International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wcm 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 Wcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wcm International Small has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Wcm International go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Wcm International
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 4.19 times more return on investment than Wcm International. However, Kinetics Paradigm is 4.19 times more volatile than Wcm International Small. It trades about 0.41 of its potential returns per unit of risk. Wcm International Small is currently generating about 0.18 per unit of risk. If you would invest 13,896 in Kinetics Paradigm Fund on September 1, 2024 and sell it today you would earn a total of 4,389 from holding Kinetics Paradigm Fund or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Wcm International Small
Performance |
| Timeline |
| Kinetics Paradigm |
| Wcm International Small |
Kinetics Paradigm and Wcm International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Wcm International
The main advantage of trading using opposite Kinetics Paradigm and Wcm International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Wcm 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 Wcm International will offset losses from the drop in Wcm 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 |
| Wcm International vs. Investment Managers Series | Wcm International vs. Wcm Focused International | Wcm International vs. Wcm Focused International | Wcm International vs. Wcm Small Cap |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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