Correlation Between NYSE Composite and Kinetics Market
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kinetics Market 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 NYSE Composite and Kinetics Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kinetics Market Opportunities, you can compare the effects of market volatilities on NYSE Composite and Kinetics Market 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 NYSE Composite with a short position of Kinetics Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kinetics Market.
Diversification Opportunities for NYSE Composite and Kinetics Market
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Kinetics is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kinetics Market Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Market Oppo and NYSE Composite 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 NYSE Composite are associated (or correlated) with Kinetics Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Market Oppo has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kinetics Market go up and down completely randomly.
Pair Corralation between NYSE Composite and Kinetics Market
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.33 times more return on investment than Kinetics Market. However, NYSE Composite is 3.05 times less risky than Kinetics Market. It trades about -0.02 of its potential returns per unit of risk. Kinetics Market Opportunities is currently generating about -0.03 per unit of risk. If you would invest 2,021,322 in NYSE Composite on December 2, 2024 and sell it today you would lose (18,503) from holding NYSE Composite or give up 0.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Kinetics Market Opportunities
Performance |
Timeline |
NYSE Composite and Kinetics Market Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kinetics Market Opportunities
Pair trading matchups for Kinetics Market
Pair Trading with NYSE Composite and Kinetics Market
The main advantage of trading using opposite NYSE Composite and Kinetics Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kinetics Market 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 Market will offset losses from the drop in Kinetics Market's long position.NYSE Composite vs. Jerash Holdings | NYSE Composite vs. European Wax Center | NYSE Composite vs. Ralph Lauren Corp | NYSE Composite vs. Toro Co |
Kinetics Market vs. Kinetics Market Opportunities | Kinetics Market vs. Kinetics Small Cap | Kinetics Market vs. Kinetics Paradigm Fund | Kinetics Market vs. Alger Capital Appreciation |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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