Correlation Between Blackrock Exchange and Kinetics Small

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

By analyzing existing cross correlation between Blackrock Exchange Portfolio and Kinetics Small Cap, you can compare the effects of market volatilities on Blackrock Exchange and Kinetics Small 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 Blackrock Exchange with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Exchange and Kinetics Small.

Diversification Opportunities for Blackrock Exchange and Kinetics Small

0.47

Correlation Coefficient

Blackrock Exchange  Kinetics Small

Very weak diversification

The 3 months correlation between Blackrock and Kinetics is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Exchange Portfolio and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and Blackrock Exchange 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 Blackrock Exchange Portfolio are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Blackrock Exchange i.e., Blackrock Exchange and Kinetics Small go up and down completely randomly.

Pair Corralation between Blackrock Exchange and Kinetics Small

Assuming the 90 days horizon Blackrock Exchange Portfolio is expected to generate 0.33 times more return on investment than Kinetics Small. However, Blackrock Exchange Portfolio is 3.03 times less risky than Kinetics Small. It trades about 0.0 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about -0.05 per unit of risk. If you would invest  236,632  in Blackrock Exchange Portfolio on December 1, 2024 and sell it today you would earn a total of  158.00  from holding Blackrock Exchange Portfolio or generate 0.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Blackrock Exchange Portfolio  vs.  Kinetics Small Cap

Blackrock Exchange

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Exchange Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Blackrock Exchange is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinetics Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetics Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Blackrock Exchange and Kinetics Small

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

The idea behind Blackrock Exchange Portfolio and Kinetics Small Cap 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.