Correlation Between Mainstay Indexed and Kinetics Global

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

By analyzing existing cross correlation between Mainstay Indexed Bond and Kinetics Global Fund, you can compare the effects of market volatilities on Mainstay Indexed and Kinetics Global 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 Mainstay Indexed with a short position of Kinetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Indexed and Kinetics Global.

Diversification Opportunities for Mainstay Indexed and Kinetics Global

-0.1

Correlation Coefficient

Mainstay Indexed  Kinetics Global

Good diversification

The 3 months correlation between Mainstay and Kinetics is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Indexed Bond and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global and Mainstay Indexed 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 Mainstay Indexed Bond are associated (or correlated) with Kinetics Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Global has no effect on the direction of Mainstay Indexed i.e., Mainstay Indexed and Kinetics Global go up and down completely randomly.

Pair Corralation between Mainstay Indexed and Kinetics Global

Assuming the 90 days horizon Mainstay Indexed is expected to generate 2.54 times less return on investment than Kinetics Global. But when comparing it to its historical volatility, Mainstay Indexed Bond is 13.5 times less risky than Kinetics Global. It trades about 0.3 of its potential returns per unit of risk. Kinetics Global Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,469  in Kinetics Global Fund on December 22, 2024 and sell it today you would earn a total of  56.00  from holding Kinetics Global Fund or generate 3.81% return on investment over 90 days.

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

Mainstay Indexed Bond  vs.  Kinetics Global Fund

Mainstay Indexed Bond

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Indexed Bond are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Indexed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinetics Global

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Kinetics Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mainstay Indexed and Kinetics Global

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

The idea behind Mainstay Indexed Bond and Kinetics Global Fund 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.