Correlation Between Kinea II and Kinea Fundo

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

By analyzing existing cross correlation between Kinea II Real and Kinea Fundo Fundos, you can compare the effects of market volatilities on Kinea II and Kinea Fundo 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 Kinea II with a short position of Kinea Fundo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinea II and Kinea Fundo.

Diversification Opportunities for Kinea II and Kinea Fundo

0.14

Correlation Coefficient

Kinea II  Kinea Fundo

Average diversification

The 3 months correlation between Kinea and Kinea is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kinea II Real and Kinea Fundo Fundos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Fundo Fundos and Kinea II 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 Kinea II Real are associated (or correlated) with Kinea Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Fundo Fundos has no effect on the direction of Kinea II i.e., Kinea II and Kinea Fundo go up and down completely randomly.

Pair Corralation between Kinea II and Kinea Fundo

Assuming the 90 days trading horizon Kinea II Real is expected to under-perform the Kinea Fundo. In addition to that, Kinea II is 3.11 times more volatile than Kinea Fundo Fundos. It trades about -0.14 of its total potential returns per unit of risk. Kinea Fundo Fundos is currently generating about 0.28 per unit of volatility. If you would invest  6,749  in Kinea Fundo Fundos on December 4, 2024 and sell it today you would earn a total of  430.00  from holding Kinea Fundo Fundos or generate 6.37% return on investment over 90 days.

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

Kinea II Real  vs.  Kinea Fundo Fundos

Kinea II Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinea II Real has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Kinea II is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinea Fundo Fundos

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kinea Fundo Fundos are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Kinea Fundo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kinea II and Kinea Fundo

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

The idea behind Kinea II Real and Kinea Fundo Fundos 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.