Correlation Between Kinetics Market and Mh Elite

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

Diversification Opportunities for Kinetics Market and Mh Elite

0.47

Correlation Coefficient

Kinetics Market  Mh Elite

Very weak diversification

The 3 months correlation between Kinetics and MHELX is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Mh Elite Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mh Elite Small 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 Mh Elite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mh Elite Small has no effect on the direction of Kinetics Market i.e., Kinetics Market and Mh Elite go up and down completely randomly.

Pair Corralation between Kinetics Market and Mh Elite

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 1.71 times more return on investment than Mh Elite. However, Kinetics Market is 1.71 times more volatile than Mh Elite Small. It trades about 0.1 of its potential returns per unit of risk. Mh Elite Small is currently generating about -0.19 per unit of risk. If you would invest  7,877  in Kinetics Market Opportunities on December 21, 2024 and sell it today you would earn a total of  847.00  from holding Kinetics Market Opportunities or generate 10.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	74.58%
Values	Daily Returns

Kinetics Market Opportunities  vs.  Mh Elite Small

Kinetics Market Oppo

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 7 (%) 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.

Mh Elite Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mh Elite Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Kinetics Market and Mh Elite

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

The idea behind Kinetics Market Opportunities and Mh Elite Small 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.