Correlation Between Kinetics Spin and Lkcm International

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

By analyzing existing cross correlation between Kinetics Spin Off And and Lkcm International Equity, you can compare the effects of market volatilities on Kinetics Spin and Lkcm International 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 Spin with a short position of Lkcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Spin and Lkcm International.

Diversification Opportunities for Kinetics Spin and Lkcm International

0.48

Correlation Coefficient

Kinetics Spin  Lkcm International

Very weak diversification

The 3 months correlation between Kinetics and Lkcm is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Spin Off And and Lkcm International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm International Equity and Kinetics Spin 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 Spin Off And are associated (or correlated) with Lkcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm International Equity has no effect on the direction of Kinetics Spin i.e., Kinetics Spin and Lkcm International go up and down completely randomly.

Pair Corralation between Kinetics Spin and Lkcm International

Assuming the 90 days horizon Kinetics Spin Off And is expected to generate 2.85 times more return on investment than Lkcm International. However, Kinetics Spin is 2.85 times more volatile than Lkcm International Equity. It trades about 0.09 of its potential returns per unit of risk. Lkcm International Equity is currently generating about 0.11 per unit of risk. If you would invest  3,402  in Kinetics Spin Off And on December 29, 2024 and sell it today you would earn a total of  435.00  from holding Kinetics Spin Off And or generate 12.79% return on investment over 90 days.

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

Kinetics Spin Off And  vs.  Lkcm International Equity

Kinetics Spin Off

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Spin Off And are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Kinetics Spin showed solid returns over the last few months and may actually be approaching a breakup point.

Lkcm International Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lkcm International Equity are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lkcm International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kinetics Spin and Lkcm International

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

The idea behind Kinetics Spin Off And and Lkcm International Equity 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.