Correlation Between Kinetics Market and Munivest Fund

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

Diversification Opportunities for Kinetics Market and Munivest Fund

0.65

Correlation Coefficient

Kinetics Market  Munivest Fund

Poor diversification

The 3 months correlation between Kinetics and Munivest is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund 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 Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of Kinetics Market i.e., Kinetics Market and Munivest Fund go up and down completely randomly.

Pair Corralation between Kinetics Market and Munivest Fund

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 2.7 times more return on investment than Munivest Fund. However, Kinetics Market is 2.7 times more volatile than Munivest Fund. It trades about 0.08 of its potential returns per unit of risk. Munivest Fund is currently generating about 0.04 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.  Munivest Fund

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.

Munivest Fund

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Munivest Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Munivest Fund is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kinetics Market and Munivest Fund

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

The idea behind Kinetics Market Opportunities and Munivest 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.