Correlation Between Kinetics Spin and Sit Small

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

Diversification Opportunities for Kinetics Spin and Sit Small

0.03

Correlation Coefficient

Kinetics Spin  Sit Small

Significant diversification

The 3 months correlation between Kinetics and Sit is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Spin Off And and Sit Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Small Cap 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 Sit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Small Cap has no effect on the direction of Kinetics Spin i.e., Kinetics Spin and Sit Small go up and down completely randomly.

Pair Corralation between Kinetics Spin and Sit Small

Assuming the 90 days horizon Kinetics Spin Off And is expected to generate 2.0 times more return on investment than Sit Small. However, Kinetics Spin is 2.0 times more volatile than Sit Small Cap. It trades about 0.09 of its potential returns per unit of risk. Sit Small Cap is currently generating about -0.12 per unit of risk. If you would invest  3,402  in Kinetics Spin Off And on December 28, 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kinetics Spin Off And  vs.  Sit Small Cap

Kinetics Spin Off

Risk-Adjusted Performance

OK

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.

Sit Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sit Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental 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 Kinetics Spin and Sit Small

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

The idea behind Kinetics Spin Off And and Sit Small Cap 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.