Correlation Between Kinetics Small and Bbh Intermediate

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

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

Diversification Opportunities for Kinetics Small and Bbh Intermediate

0.22

Correlation Coefficient

Kinetics Small  Bbh Intermediate

Modest diversification

The 3 months correlation between Kinetics and Bbh is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Bbh Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Intermediate Mun and Kinetics Small 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 Small Cap are associated (or correlated) with Bbh Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Intermediate Mun has no effect on the direction of Kinetics Small i.e., Kinetics Small and Bbh Intermediate go up and down completely randomly.

Pair Corralation between Kinetics Small and Bbh Intermediate

Assuming the 90 days horizon Kinetics Small Cap is expected to generate 11.81 times more return on investment than Bbh Intermediate. However, Kinetics Small is 11.81 times more volatile than Bbh Intermediate Municipal. It trades about 0.09 of its potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about 0.0 per unit of risk. If you would invest  17,004  in Kinetics Small Cap on December 29, 2024 and sell it today you would earn a total of  1,818  from holding Kinetics Small Cap or generate 10.69% return on investment over 90 days.

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

Kinetics Small Cap  vs.  Bbh Intermediate Municipal

Kinetics Small Cap

Risk-Adjusted Performance

OK

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

Bbh Intermediate Mun

Risk-Adjusted Performance

Weak

Over the last 90 days Bbh Intermediate Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Bbh Intermediate 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 Small and Bbh Intermediate

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

The idea behind Kinetics Small Cap and Bbh Intermediate Municipal 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.