Correlation Between Europacific Growth and Kinetics Market

Can any of the company-specific risk be diversified away by investing in both Europacific Growth 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 Europacific Growth and Kinetics Market into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Europacific Growth Fund and Kinetics Market Opportunities, you can compare the effects of market volatilities on Europacific Growth 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 Europacific Growth with a short position of Kinetics Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Kinetics Market.

Diversification Opportunities for Europacific Growth and Kinetics Market

-0.27

Correlation Coefficient

Europacific Growth  Kinetics Market

Very good diversification

The 3 months correlation between Europacific and Kinetics is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth 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 Europacific Growth 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 Europacific Growth 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 Europacific Growth i.e., Europacific Growth and Kinetics Market go up and down completely randomly.

Pair Corralation between Europacific Growth and Kinetics Market

Assuming the 90 days horizon Europacific Growth Fund is expected to under-perform the Kinetics Market. But the mutual fund apears to be less risky and, when comparing its historical volatility, Europacific Growth Fund is 1.88 times less risky than Kinetics Market. The mutual fund trades about -0.34 of its potential returns per unit of risk. The Kinetics Market Opportunities is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  7,993  in Kinetics Market Opportunities on October 10, 2024 and sell it today you would lose (290.00) from holding Kinetics Market Opportunities or give up 3.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Europacific Growth Fund  vs.  Kinetics Market Opportunities

Europacific Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Europacific Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Kinetics Market Oppo

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Kinetics Market showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Europacific Growth and Kinetics Market

The main advantage of trading using opposite Europacific Growth and Kinetics Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth 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.

The idea behind Europacific Growth Fund and Kinetics Market Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.