Correlation Between Kinetics Internet and Firsthand Technology
Can any of the company-specific risk be diversified away by investing in both Kinetics Internet and Firsthand Technology 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 Internet and Firsthand Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Internet Fund and Firsthand Technology Opportunities, you can compare the effects of market volatilities on Kinetics Internet and Firsthand Technology 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 Internet with a short position of Firsthand Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Internet and Firsthand Technology.
Diversification Opportunities for Kinetics Internet and Firsthand Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and FIRSTHAND is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Internet Fund and Firsthand Technology Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Technology and Kinetics Internet 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 Internet Fund are associated (or correlated) with Firsthand Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Technology has no effect on the direction of Kinetics Internet i.e., Kinetics Internet and Firsthand Technology go up and down completely randomly.
Pair Corralation between Kinetics Internet and Firsthand Technology
Assuming the 90 days horizon Kinetics Internet Fund is expected to generate 1.36 times more return on investment than Firsthand Technology. However, Kinetics Internet is 1.36 times more volatile than Firsthand Technology Opportunities. It trades about 0.34 of its potential returns per unit of risk. Firsthand Technology Opportunities is currently generating about 0.15 per unit of risk. If you would invest 7,705 in Kinetics Internet Fund on September 2, 2024 and sell it today you would earn a total of 3,946 from holding Kinetics Internet Fund or generate 51.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Internet Fund vs. Firsthand Technology Opportuni
Performance |
| Timeline |
| Kinetics Internet |
| Firsthand Technology |
Kinetics Internet and Firsthand Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Internet and Firsthand Technology
The main advantage of trading using opposite Kinetics Internet and Firsthand Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Internet position performs unexpectedly, Firsthand Technology 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 Firsthand Technology will offset losses from the drop in Firsthand Technology's long position.| Kinetics Internet vs. Victory Munder Multi Cap | Kinetics Internet vs. Tomorrows Scholar College | Kinetics Internet vs. Janus Global Technology | Kinetics Internet vs. Invesco Technology Fund |
| Firsthand Technology vs. Berkshire Focus | Firsthand Technology vs. Red Oak Technology | Firsthand Technology vs. Jacob Internet Fund | Firsthand Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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