Correlation Between Kinetics Global and Cm Commodity

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

Diversification Opportunities for Kinetics Global and Cm Commodity

0.61

Correlation Coefficient

Kinetics Global  Cm Commodity

Poor diversification

The 3 months correlation between Kinetics and COMIX is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Cm Modity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cm Modity Index 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 Cm Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cm Modity Index has no effect on the direction of Kinetics Global i.e., Kinetics Global and Cm Commodity go up and down completely randomly.

Pair Corralation between Kinetics Global and Cm Commodity

Assuming the 90 days horizon Kinetics Global is expected to generate 1.11 times less return on investment than Cm Commodity. In addition to that, Kinetics Global is 2.36 times more volatile than Cm Modity Index. It trades about 0.06 of its total potential returns per unit of risk. Cm Modity Index is currently generating about 0.15 per unit of volatility. If you would invest  6,805  in Cm Modity Index on December 29, 2024 and sell it today you would earn a total of  335.00  from holding Cm Modity Index or generate 4.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Kinetics Global Fund  vs.  Cm Modity Index

Kinetics Global

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Kinetics Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cm Modity Index

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cm Modity Index are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cm Commodity 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 Cm Commodity

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

The idea behind Kinetics Global Fund and Cm Modity Index 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.