Correlation Between Kinetics Global and Rbc Global

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

Diversification Opportunities for Kinetics Global and Rbc Global

0.79

Correlation Coefficient

Kinetics Global  Rbc Global

Poor diversification

The 3 months correlation between Kinetics and RBC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Rbc Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Global Opportunities 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 Rbc Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Global Opportunities has no effect on the direction of Kinetics Global i.e., Kinetics Global and Rbc Global go up and down completely randomly.

Pair Corralation between Kinetics Global and Rbc Global

Assuming the 90 days horizon Kinetics Global Fund is expected to generate 1.99 times more return on investment than Rbc Global. However, Kinetics Global is 1.99 times more volatile than Rbc Global Opportunities. It trades about 0.4 of its potential returns per unit of risk. Rbc Global Opportunities is currently generating about 0.16 per unit of risk. If you would invest  1,154  in Kinetics Global Fund on September 2, 2024 and sell it today you would earn a total of  492.00  from holding Kinetics Global Fund or generate 42.63% 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.  Rbc Global Opportunities

Kinetics Global

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 31 (%) 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.

Rbc Global Opportunities

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc Global Opportunities are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Rbc Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kinetics Global and Rbc Global

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

The idea behind Kinetics Global Fund and Rbc Global 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.