Correlation Between Kinetics Global and Dreyfus Active
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Dreyfus Active 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 Global and Dreyfus Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Global Fund and Dreyfus Active Midcap, you can compare the effects of market volatilities on Kinetics Global and Dreyfus Active 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 Global with a short position of Dreyfus Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Dreyfus Active.
Diversification Opportunities for Kinetics Global and Dreyfus Active
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and Dreyfus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Dreyfus Active Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Active Midcap and Kinetics Global 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 Global Fund are associated (or correlated) with Dreyfus Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Active Midcap has no effect on the direction of Kinetics Global i.e., Kinetics Global and Dreyfus Active go up and down completely randomly.
Pair Corralation between Kinetics Global and Dreyfus Active
Assuming the 90 days horizon Kinetics Global Fund is expected to generate 1.71 times more return on investment than Dreyfus Active. However, Kinetics Global is 1.71 times more volatile than Dreyfus Active Midcap. It trades about 0.21 of its potential returns per unit of risk. Dreyfus Active Midcap is currently generating about 0.14 per unit of risk. If you would invest 1,213 in Kinetics Global Fund on September 1, 2024 and sell it today you would earn a total of 596.00 from holding Kinetics Global Fund or generate 49.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Global Fund vs. Dreyfus Active Midcap
Performance |
| Timeline |
| Kinetics Global |
| Dreyfus Active Midcap |
Kinetics Global and Dreyfus Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Dreyfus Active
The main advantage of trading using opposite Kinetics Global and Dreyfus Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Dreyfus Active 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 Dreyfus Active will offset losses from the drop in Dreyfus Active's long position.| Kinetics Global vs. Kinetics Internet Fund | Kinetics Global vs. Kinetics Paradigm Fund | Kinetics Global vs. Jacob Internet Fund | Kinetics Global 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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