Correlation Between Kinetics Paradigm and Tiaa Cref

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

Diversification Opportunities for Kinetics Paradigm and Tiaa Cref

0.55

Correlation Coefficient

Kinetics Paradigm  Tiaa Cref

Very weak diversification

The 3 months correlation between Kinetics and Tiaa is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Tiaa Cref Small Cap Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Small 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 Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Small has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Tiaa Cref go up and down completely randomly.

Pair Corralation between Kinetics Paradigm and Tiaa Cref

Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.96 times more return on investment than Tiaa Cref. However, Kinetics Paradigm is 1.96 times more volatile than Tiaa Cref Small Cap Blend. It trades about 0.16 of its potential returns per unit of risk. Tiaa Cref Small Cap Blend is currently generating about -0.06 per unit of risk. If you would invest  11,855  in Kinetics Paradigm Fund on December 2, 2024 and sell it today you would earn a total of  1,572  from holding Kinetics Paradigm Fund or generate 13.26% 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.  Tiaa Cref Small Cap Blend

Kinetics Paradigm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetics Paradigm Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Tiaa Cref Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tiaa Cref Small Cap Blend 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 fundamental drivers 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 Paradigm and Tiaa Cref

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

The idea behind Kinetics Paradigm Fund and Tiaa Cref Small Cap Blend 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.