Correlation Between Kinetics Global and Deutsche Global

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

Diversification Opportunities for Kinetics Global and Deutsche Global

-0.52

Correlation Coefficient

Kinetics Global  Deutsche Global

Excellent diversification

The 3 months correlation between Kinetics and Deutsche is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Deutsche Global Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Global Inflation 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 Deutsche Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Global Inflation has no effect on the direction of Kinetics Global i.e., Kinetics Global and Deutsche Global go up and down completely randomly.

Pair Corralation between Kinetics Global and Deutsche Global

Assuming the 90 days horizon Kinetics Global Fund is expected to under-perform the Deutsche Global. In addition to that, Kinetics Global is 5.11 times more volatile than Deutsche Global Inflation. It trades about -0.37 of its total potential returns per unit of risk. Deutsche Global Inflation is currently generating about -0.44 per unit of volatility. If you would invest  966.00  in Deutsche Global Inflation on October 4, 2024 and sell it today you would lose (23.00) from holding Deutsche Global Inflation or give up 2.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kinetics Global Fund  vs.  Deutsche Global Inflation

Kinetics Global

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 13 (%) 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.

Deutsche Global Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Global Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Deutsche 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 Deutsche Global

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

The idea behind Kinetics Global Fund and Deutsche Global Inflation 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.