Correlation Between Kinea II and Kinea Oportunidades

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

Diversification Opportunities for Kinea II and Kinea Oportunidades

0.43

Correlation Coefficient

Kinea II  Kinea Oportunidades

Very weak diversification

The 3 months correlation between Kinea and Kinea is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kinea II Real and Kinea Oportunidades Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Oportunidades Real 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 Oportunidades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Oportunidades Real has no effect on the direction of Kinea II i.e., Kinea II and Kinea Oportunidades go up and down completely randomly.

Pair Corralation between Kinea II and Kinea Oportunidades

Assuming the 90 days trading horizon Kinea II Real is expected to generate 4.64 times more return on investment than Kinea Oportunidades. However, Kinea II is 4.64 times more volatile than Kinea Oportunidades Real. It trades about 0.02 of its potential returns per unit of risk. Kinea Oportunidades Real is currently generating about -0.1 per unit of risk. If you would invest  26.00  in Kinea II Real on October 20, 2024 and sell it today you would lose (3.00) from holding Kinea II Real or give up 11.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Kinea II Real  vs.  Kinea Oportunidades Real

Kinea II Real

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kinea II Real are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Kinea II may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kinea Oportunidades Real

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kinea II and Kinea Oportunidades

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

The idea behind Kinea II Real and Kinea Oportunidades Real 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.