Correlation Between Kinetics Market and Fidelity Capital

Can any of the company-specific risk be diversified away by investing in both Kinetics Market and Fidelity Capital 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 Market and Fidelity Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinetics Market Opportunities and Fidelity Capital Income, you can compare the effects of market volatilities on Kinetics Market and Fidelity Capital 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 Market with a short position of Fidelity Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Fidelity Capital.

Diversification Opportunities for Kinetics Market and Fidelity Capital

0.61

Correlation Coefficient

Kinetics Market  Fidelity Capital

Poor diversification

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

Pair Corralation between Kinetics Market and Fidelity Capital

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 4.39 times more return on investment than Fidelity Capital. However, Kinetics Market is 4.39 times more volatile than Fidelity Capital Income. It trades about 0.08 of its potential returns per unit of risk. Fidelity Capital Income is currently generating about -0.04 per unit of risk. If you would invest  7,530  in Kinetics Market Opportunities on December 30, 2024 and sell it today you would earn a total of  689.00  from holding Kinetics Market Opportunities or generate 9.15% return on investment over 90 days.

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

Kinetics Market Opportunities  vs.  Fidelity Capital Income

Kinetics Market Oppo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kinetics Market may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Fidelity Capital Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Capital Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Fidelity Capital 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 Market and Fidelity Capital

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

The idea behind Kinetics Market Opportunities and Fidelity Capital Income 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.