Correlation Between Kinetics Market and Dana Epiphany

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

Diversification Opportunities for Kinetics Market and Dana Epiphany

0.2

Correlation Coefficient

Kinetics Market  Dana Epiphany

Modest diversification

The 3 months correlation between Kinetics and Dana is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Dana Epiphany Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Epiphany Esg 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 Dana Epiphany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Epiphany Esg has no effect on the direction of Kinetics Market i.e., Kinetics Market and Dana Epiphany go up and down completely randomly.

Pair Corralation between Kinetics Market and Dana Epiphany

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.85 times more return on investment than Dana Epiphany. However, Kinetics Market is 1.85 times more volatile than Dana Epiphany Esg. It trades about 0.08 of its potential returns per unit of risk. Dana Epiphany Esg is currently generating about -0.07 per unit of risk. If you would invest  7,141  in Kinetics Market Opportunities on December 29, 2024 and sell it today you would earn a total of  643.00  from holding Kinetics Market Opportunities or generate 9.0% return on investment over 90 days.

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

Kinetics Market Opportunities  vs.  Dana Epiphany Esg

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 fundamental indicators, Kinetics Market may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Dana Epiphany Esg

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dana Epiphany Esg has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Dana Epiphany 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 Dana Epiphany

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

The idea behind Kinetics Market Opportunities and Dana Epiphany Esg 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.