Correlation Between Kinetics Small and Jhancock Disciplined

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

Diversification Opportunities for Kinetics Small and Jhancock Disciplined

0.52

Correlation Coefficient

Kinetics Small  Jhancock Disciplined

Very weak diversification

The 3 months correlation between Kinetics and Jhancock is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Jhancock Disciplined Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Disciplined 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 Jhancock Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Disciplined has no effect on the direction of Kinetics Small i.e., Kinetics Small and Jhancock Disciplined go up and down completely randomly.

Pair Corralation between Kinetics Small and Jhancock Disciplined

Assuming the 90 days horizon Kinetics Small Cap is expected to under-perform the Jhancock Disciplined. But the mutual fund apears to be less risky and, when comparing its historical volatility, Kinetics Small Cap is 1.04 times less risky than Jhancock Disciplined. The mutual fund trades about -0.51 of its potential returns per unit of risk. The Jhancock Disciplined Value is currently generating about -0.37 of returns per unit of risk over similar time horizon. If you would invest  2,738  in Jhancock Disciplined Value on October 4, 2024 and sell it today you would lose (485.00) from holding Jhancock Disciplined Value or give up 17.71% of portfolio value over 90 days.

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

Kinetics Small Cap  vs.  Jhancock Disciplined Value

Kinetics Small Cap

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Small Cap are ranked lower than 3 (%) 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 February 2025.

Jhancock Disciplined

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jhancock Disciplined Value 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 basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Kinetics Small and Jhancock Disciplined

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

The idea behind Kinetics Small Cap and Jhancock Disciplined Value 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.