Correlation Between Mid-cap 15x and Kinetics Global

Can any of the company-specific risk be diversified away by investing in both Mid-cap 15x 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 Mid-cap 15x and Kinetics Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mid Cap 15x Strategy and Kinetics Global Fund, you can compare the effects of market volatilities on Mid-cap 15x 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 Mid-cap 15x with a short position of Kinetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap 15x and Kinetics Global.

Diversification Opportunities for Mid-cap 15x and Kinetics Global

0.6

Correlation Coefficient

Mid-cap 15x  Kinetics Global

Poor diversification

The 3 months correlation between Mid-cap and Kinetics is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Kinetics Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Global and Mid-cap 15x 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 Mid Cap 15x Strategy 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 Mid-cap 15x i.e., Mid-cap 15x and Kinetics Global go up and down completely randomly.

Pair Corralation between Mid-cap 15x and Kinetics Global

Assuming the 90 days horizon Mid-cap 15x is expected to generate 2.58 times less return on investment than Kinetics Global. But when comparing it to its historical volatility, Mid Cap 15x Strategy is 1.03 times less risky than Kinetics Global. It trades about 0.08 of its potential returns per unit of risk. Kinetics Global Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,318  in Kinetics Global Fund on October 24, 2024 and sell it today you would earn a total of  278.00  from holding Kinetics Global Fund or generate 21.09% return on investment over 90 days.

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

Mid Cap 15x Strategy  vs.  Kinetics Global Fund

Mid Cap 15x

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap 15x Strategy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Mid-cap 15x may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kinetics Global

Risk-Adjusted Performance

15 of 100

Good

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

Pair Trading with Mid-cap 15x and Kinetics Global

The main advantage of trading using opposite Mid-cap 15x and Kinetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap 15x 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 Mid Cap 15x Strategy 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.