Correlation Between Kinetics Market and Blackrock Muniholdings

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

Diversification Opportunities for Kinetics Market and Blackrock Muniholdings

0.7

Correlation Coefficient

Kinetics Market  Blackrock Muniholdings

Poor diversification

The 3 months correlation between Kinetics and Blackrock is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings 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 Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Kinetics Market i.e., Kinetics Market and Blackrock Muniholdings go up and down completely randomly.

Pair Corralation between Kinetics Market and Blackrock Muniholdings

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 3.17 times more return on investment than Blackrock Muniholdings. However, Kinetics Market is 3.17 times more volatile than Blackrock Muniholdings Closed. It trades about 0.08 of its potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about 0.06 per unit of risk. If you would invest  7,668  in Kinetics Market Opportunities on December 30, 2024 and sell it today you would earn a total of  706.00  from holding Kinetics Market Opportunities or generate 9.21% 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.  Blackrock Muniholdings Closed

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.

Blackrock Muniholdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniholdings Closed are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical indicators, Blackrock Muniholdings is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Kinetics Market and Blackrock Muniholdings

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

The idea behind Kinetics Market Opportunities and Blackrock Muniholdings Closed 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 Transaction History module to view history of all your transactions and understand their impact on performance.