Correlation Between Kinetics Global and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Scharf Global 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 Scharf Global 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 Scharf Global Opportunity, you can compare the effects of market volatilities on Kinetics Global and Scharf Global 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 Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Scharf Global.
Diversification Opportunities for Kinetics Global and Scharf Global
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Scharf is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity 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 Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Kinetics Global i.e., Kinetics Global and Scharf Global go up and down completely randomly.
Pair Corralation between Kinetics Global and Scharf Global
Assuming the 90 days horizon Kinetics Global Fund is expected to generate 2.02 times more return on investment than Scharf Global. However, Kinetics Global is 2.02 times more volatile than Scharf Global Opportunity. It trades about 0.12 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.07 per unit of risk. If you would invest 807.00 in Kinetics Global Fund on November 27, 2024 and sell it today you would earn a total of 874.00 from holding Kinetics Global Fund or generate 108.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Global Fund vs. Scharf Global Opportunity
Performance |
| Timeline |
| Kinetics Global |
| Scharf Global Opportunity |
Kinetics Global and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Global and Scharf Global
The main advantage of trading using opposite Kinetics Global and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global'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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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