Correlation Between Dws Government and Kinetics Small

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

By analyzing existing cross correlation between Dws Government Money and Kinetics Small Cap, you can compare the effects of market volatilities on Dws Government and Kinetics Small 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 Dws Government with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dws Government and Kinetics Small.

Diversification Opportunities for Dws Government and Kinetics Small

0.0

Correlation Coefficient

Dws Government  Kinetics Small

Pay attention - limited upside

The 3 months correlation between Dws and Kinetics is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dws Government Money and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and Dws Government 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 Dws Government Money are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Dws Government i.e., Dws Government and Kinetics Small go up and down completely randomly.

Pair Corralation between Dws Government and Kinetics Small

If you would invest  17,905  in Kinetics Small Cap on December 20, 2024 and sell it today you would earn a total of  1,855  from holding Kinetics Small Cap or generate 10.36% return on investment over 90 days.

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

Dws Government Money  vs.  Kinetics Small Cap

Dws Government Money

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dws Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dws Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinetics Small Cap

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Small Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kinetics Small may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dws Government and Kinetics Small

The main advantage of trading using opposite Dws Government and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Government position performs unexpectedly, Kinetics Small 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 Small will offset losses from the drop in Kinetics Small's long position.

The idea behind Dws Government Money and Kinetics Small Cap 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.