Correlation Between Domo Fundo and Kinea Hedge

Can any of the company-specific risk be diversified away by investing in both Domo Fundo and Kinea Hedge 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 Domo Fundo and Kinea Hedge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Domo Fundo de and Kinea Hedge Fund, you can compare the effects of market volatilities on Domo Fundo and Kinea Hedge 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 Domo Fundo with a short position of Kinea Hedge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Domo Fundo and Kinea Hedge.

Diversification Opportunities for Domo Fundo and Kinea Hedge

0.14

Correlation Coefficient

Domo Fundo  Kinea Hedge

Average diversification

The 3 months correlation between Domo and Kinea is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Domo Fundo de and Kinea Hedge Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Hedge Fund and Domo Fundo 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 Domo Fundo de are associated (or correlated) with Kinea Hedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Hedge Fund has no effect on the direction of Domo Fundo i.e., Domo Fundo and Kinea Hedge go up and down completely randomly.

Pair Corralation between Domo Fundo and Kinea Hedge

Assuming the 90 days trading horizon Domo Fundo de is expected to generate 0.69 times more return on investment than Kinea Hedge. However, Domo Fundo de is 1.44 times less risky than Kinea Hedge. It trades about 0.03 of its potential returns per unit of risk. Kinea Hedge Fund is currently generating about -0.28 per unit of risk. If you would invest  7,375  in Domo Fundo de on September 14, 2024 and sell it today you would earn a total of  75.00  from holding Domo Fundo de or generate 1.02% return on investment over 90 days.

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

Domo Fundo de  vs.  Kinea Hedge Fund

Domo Fundo de

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Domo Fundo de are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Domo Fundo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinea Hedge Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinea Hedge Fund has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's technical indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Domo Fundo and Kinea Hedge

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

The idea behind Domo Fundo de and Kinea Hedge 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.