Correlation Between Kinetics Market and Grizzly Short

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

Diversification Opportunities for Kinetics Market and Grizzly Short

-0.95

Correlation Coefficient

Kinetics Market  Grizzly Short

Pay attention - limited upside

The 3 months correlation between Kinetics and Grizzly is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Grizzly Short Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grizzly Short 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 Grizzly Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grizzly Short has no effect on the direction of Kinetics Market i.e., Kinetics Market and Grizzly Short go up and down completely randomly.

Pair Corralation between Kinetics Market and Grizzly Short

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 2.77 times more return on investment than Grizzly Short. However, Kinetics Market is 2.77 times more volatile than Grizzly Short Fund. It trades about 0.41 of its potential returns per unit of risk. Grizzly Short Fund is currently generating about -0.23 per unit of risk. If you would invest  5,357  in Kinetics Market Opportunities on September 2, 2024 and sell it today you would earn a total of  3,612  from holding Kinetics Market Opportunities or generate 67.43% return on investment over 90 days.

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

Kinetics Market Opportunities  vs.  Grizzly Short Fund

Kinetics Market Oppo

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 32 (%) 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.

Grizzly Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grizzly Short Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Grizzly Short

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

The idea behind Kinetics Market Opportunities and Grizzly Short Fund 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.