Correlation Between Kinetics Global and Pioneer Classic

Can any of the company-specific risk be diversified away by investing in both Kinetics Global and Pioneer Classic 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 Pioneer Classic 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 Pioneer Classic Balanced, you can compare the effects of market volatilities on Kinetics Global and Pioneer Classic 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 Pioneer Classic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and Pioneer Classic.

Diversification Opportunities for Kinetics Global and Pioneer Classic

0.67

Correlation Coefficient

Kinetics Global  Pioneer Classic

Poor diversification

The 3 months correlation between Kinetics and Pioneer is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Pioneer Classic Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Classic Balanced 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 Pioneer Classic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Classic Balanced has no effect on the direction of Kinetics Global i.e., Kinetics Global and Pioneer Classic go up and down completely randomly.

Pair Corralation between Kinetics Global and Pioneer Classic

Assuming the 90 days horizon Kinetics Global is expected to generate 1.43 times less return on investment than Pioneer Classic. In addition to that, Kinetics Global is 4.63 times more volatile than Pioneer Classic Balanced. It trades about 0.03 of its total potential returns per unit of risk. Pioneer Classic Balanced is currently generating about 0.17 per unit of volatility. If you would invest  1,120  in Pioneer Classic Balanced on September 16, 2024 and sell it today you would earn a total of  16.00  from holding Pioneer Classic Balanced or generate 1.43% 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.  Pioneer Classic Balanced

Kinetics Global

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Kinetics Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pioneer Classic Balanced

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Classic Balanced are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Pioneer Classic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kinetics Global and Pioneer Classic

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

The idea behind Kinetics Global Fund and Pioneer Classic Balanced 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.