Correlation Between Kinetics Global and Artisan Global

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

Diversification Opportunities for Kinetics Global and Artisan Global

0.88

Correlation Coefficient

Kinetics Global  Artisan Global

Very poor diversification

The 3 months correlation between Kinetics and Artisan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Artisan Global Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Uncon 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 Artisan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Global Uncon has no effect on the direction of Kinetics Global i.e., Kinetics Global and Artisan Global go up and down completely randomly.

Pair Corralation between Kinetics Global and Artisan Global

Assuming the 90 days horizon Kinetics Global Fund is expected to generate 11.22 times more return on investment than Artisan Global. However, Kinetics Global is 11.22 times more volatile than Artisan Global Unconstrained. It trades about 0.41 of its potential returns per unit of risk. Artisan Global Unconstrained is currently generating about 0.28 per unit of risk. If you would invest  1,154  in Kinetics Global Fund on August 31, 2024 and sell it today you would earn a total of  501.00  from holding Kinetics Global Fund or generate 43.41% return on investment over 90 days.

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

Kinetics Global Fund  vs.  Artisan Global Unconstrained

Kinetics Global

Risk-Adjusted Performance

32 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 32 (%) 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.

Artisan Global Uncon

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Global Unconstrained are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Global 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 Artisan Global

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

The idea behind Kinetics Global Fund and Artisan Global Unconstrained 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.