Correlation Between Maingate Mlp and Kinetics Paradigm

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

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

Diversification Opportunities for Maingate Mlp and Kinetics Paradigm

0.94

Correlation Coefficient

Maingate Mlp  Kinetics Paradigm

Almost no diversification

The 3 months correlation between Maingate and Kinetics is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Maingate Mlp Fund and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm and Maingate Mlp 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 Maingate Mlp Fund are associated (or correlated) with Kinetics Paradigm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Paradigm has no effect on the direction of Maingate Mlp i.e., Maingate Mlp and Kinetics Paradigm go up and down completely randomly.

Pair Corralation between Maingate Mlp and Kinetics Paradigm

Assuming the 90 days horizon Maingate Mlp Fund is expected to generate 0.28 times more return on investment than Kinetics Paradigm. However, Maingate Mlp Fund is 3.62 times less risky than Kinetics Paradigm. It trades about 0.03 of its potential returns per unit of risk. Kinetics Paradigm Fund is currently generating about -0.08 per unit of risk. If you would invest  877.00  in Maingate Mlp Fund on September 16, 2024 and sell it today you would earn a total of  5.00  from holding Maingate Mlp Fund or generate 0.57% return on investment over 90 days.

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

Maingate Mlp Fund  vs.  Kinetics Paradigm Fund

Maingate Mlp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maingate Mlp Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Maingate Mlp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kinetics Paradigm

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Paradigm Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kinetics Paradigm showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maingate Mlp and Kinetics Paradigm

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

The idea behind Maingate Mlp Fund and Kinetics Paradigm 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.