Correlation Between Kinetics Market and Emerging Markets

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

Diversification Opportunities for Kinetics Market and Emerging Markets

-0.44

Correlation Coefficient

Kinetics Market  Emerging Markets

Very good diversification

The 3 months correlation between Kinetics and Emerging is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Emerging Markets Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Growth 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Growth has no effect on the direction of Kinetics Market i.e., Kinetics Market and Emerging Markets go up and down completely randomly.

Pair Corralation between Kinetics Market and Emerging Markets

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.87 times more return on investment than Emerging Markets. However, Kinetics Market is 1.87 times more volatile than Emerging Markets Growth. It trades about 0.09 of its potential returns per unit of risk. Emerging Markets Growth is currently generating about 0.01 per unit of risk. If you would invest  3,997  in Kinetics Market Opportunities on October 9, 2024 and sell it today you would earn a total of  3,709  from holding Kinetics Market Opportunities or generate 92.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Kinetics Market Opportunities  vs.  Emerging Markets Growth

Kinetics Market Oppo

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Kinetics Market showed solid returns over the last few months and may actually be approaching a breakup point.

Emerging Markets Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emerging Markets Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Kinetics Market and Emerging Markets

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

The idea behind Kinetics Market Opportunities and Emerging Markets Growth 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.