Correlation Between Kinetics Market and Real Assets

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

Diversification Opportunities for Kinetics Market and Real Assets

-0.15

Correlation Coefficient

Kinetics Market  Real Assets

Good diversification

The 3 months correlation between Kinetics and Real is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Real Assets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Assets Portfolio 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 Real Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Assets Portfolio has no effect on the direction of Kinetics Market i.e., Kinetics Market and Real Assets go up and down completely randomly.

Pair Corralation between Kinetics Market and Real Assets

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 4.53 times more return on investment than Real Assets. However, Kinetics Market is 4.53 times more volatile than Real Assets Portfolio. It trades about 0.42 of its potential returns per unit of risk. Real Assets Portfolio is currently generating about 0.49 per unit of risk. If you would invest  7,404  in Kinetics Market Opportunities on October 25, 2024 and sell it today you would earn a total of  972.00  from holding Kinetics Market Opportunities or generate 13.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Kinetics Market Opportunities  vs.  Real Assets Portfolio

Kinetics Market Oppo

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities 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 Market showed solid returns over the last few months and may actually be approaching a breakup point.

Real Assets Portfolio

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Kinetics Market Opportunities and Real Assets Portfolio 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.