Correlation Between Kinetics Paradigm and Blackrock Bal

Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Blackrock Bal 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 Paradigm and Blackrock Bal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinetics Paradigm Fund and Blackrock Bal Cap, you can compare the effects of market volatilities on Kinetics Paradigm and Blackrock Bal 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 Paradigm with a short position of Blackrock Bal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Blackrock Bal.

Diversification Opportunities for Kinetics Paradigm and Blackrock Bal

0.57

Correlation Coefficient

Kinetics Paradigm  Blackrock Bal

Very weak diversification

The 3 months correlation between Kinetics and Blackrock is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Blackrock Bal Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Bal Cap and Kinetics Paradigm 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 Paradigm Fund are associated (or correlated) with Blackrock Bal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Bal Cap has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Blackrock Bal go up and down completely randomly.

Pair Corralation between Kinetics Paradigm and Blackrock Bal

Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 4.74 times more return on investment than Blackrock Bal. However, Kinetics Paradigm is 4.74 times more volatile than Blackrock Bal Cap. It trades about 0.08 of its potential returns per unit of risk. Blackrock Bal Cap is currently generating about 0.03 per unit of risk. If you would invest  12,733  in Kinetics Paradigm Fund on December 30, 2024 and sell it today you would earn a total of  1,392  from holding Kinetics Paradigm Fund or generate 10.93% return on investment over 90 days.

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

Kinetics Paradigm Fund  vs.  Blackrock Bal Cap

Kinetics Paradigm

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Paradigm Fund 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 Paradigm may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Blackrock Bal Cap

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Bal Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Blackrock Bal 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 Paradigm and Blackrock Bal

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

The idea behind Kinetics Paradigm Fund and Blackrock Bal Cap 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.