Correlation Between Kinetics Paradigm and Nuveen Dow
Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Nuveen Dow 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 Nuveen Dow 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 Nuveen Dow 30, you can compare the effects of market volatilities on Kinetics Paradigm and Nuveen Dow 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 Nuveen Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Nuveen Dow.
Diversification Opportunities for Kinetics Paradigm and Nuveen Dow
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Nuveen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Nuveen Dow 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Dow 30 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 Nuveen Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Dow 30 has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Nuveen Dow go up and down completely randomly.
Pair Corralation between Kinetics Paradigm and Nuveen Dow
Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 3.67 times more return on investment than Nuveen Dow. However, Kinetics Paradigm is 3.67 times more volatile than Nuveen Dow 30. It trades about 0.15 of its potential returns per unit of risk. Nuveen Dow 30 is currently generating about 0.05 per unit of risk. If you would invest 10,108 in Kinetics Paradigm Fund on December 5, 2024 and sell it today you would earn a total of 5,327 from holding Kinetics Paradigm Fund or generate 52.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Paradigm Fund vs. Nuveen Dow 30
Performance |
| Timeline |
| Kinetics Paradigm |
| Nuveen Dow 30 |
Kinetics Paradigm and Nuveen Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Paradigm and Nuveen Dow
The main advantage of trading using opposite Kinetics Paradigm and Nuveen Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Paradigm position performs unexpectedly, Nuveen Dow 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 Nuveen Dow will offset losses from the drop in Nuveen Dow's long position.| Kinetics Paradigm vs. Kinetics Small Cap | ||
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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