Correlation Between Kinetics Global and Kinetics Market
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Kinetics Market 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 Kinetics Market 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 Kinetics Market Opportunities, you can compare the effects of market volatilities on Kinetics Global and Kinetics Market 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 Kinetics Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Kinetics Market.
Diversification Opportunities for Kinetics Global and Kinetics Market
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Kinetics and Kinetics is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Kinetics Market Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Market Oppo 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 Kinetics Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Market Oppo has no effect on the direction of Kinetics Global i.e., Kinetics Global and Kinetics Market go up and down completely randomly.
Pair Corralation between Kinetics Global and Kinetics Market
Assuming the 90 days horizon Kinetics Global is expected to generate 1.15 times less return on investment than Kinetics Market. But when comparing it to its historical volatility, Kinetics Global Fund is 1.17 times less risky than Kinetics Market. It trades about 0.19 of its potential returns per unit of risk. Kinetics Market Opportunities is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,143 in Kinetics Market Opportunities on August 25, 2024 and sell it today you would earn a total of 5,195 from holding Kinetics Market Opportunities or generate 125.39% 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. Kinetics Market Opportunities
Performance |
| Timeline |
| Kinetics Global |
| Kinetics Market Oppo |
Kinetics Global and Kinetics Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Kinetics Market
The main advantage of trading using opposite Kinetics Global and Kinetics Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Kinetics Market 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 Kinetics Market will offset losses from the drop in Kinetics Market'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 |
| Kinetics Market vs. Kinetics Global Fund | Kinetics Market vs. Kinetics Global Fund | Kinetics Market vs. Kinetics Paradigm Fund | Kinetics Market vs. Kinetics Internet 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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