Correlation Between Transamerica Intermediate and Kinetics Spin-off

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

By analyzing existing cross correlation between Transamerica Intermediate Muni and Kinetics Spin Off And, you can compare the effects of market volatilities on Transamerica Intermediate and Kinetics Spin-off 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 Transamerica Intermediate with a short position of Kinetics Spin-off. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Intermediate and Kinetics Spin-off.

Diversification Opportunities for Transamerica Intermediate and Kinetics Spin-off

0.49

Correlation Coefficient

Transamerica Intermediate  Kinetics Spin-off

Very weak diversification

The 3 months correlation between Transamerica and Kinetics is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Intermediate Muni and Kinetics Spin Off And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Spin Off and Transamerica Intermediate 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 Transamerica Intermediate Muni are associated (or correlated) with Kinetics Spin-off. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Spin Off has no effect on the direction of Transamerica Intermediate i.e., Transamerica Intermediate and Kinetics Spin-off go up and down completely randomly.

Pair Corralation between Transamerica Intermediate and Kinetics Spin-off

Assuming the 90 days horizon Transamerica Intermediate Muni is expected to generate 0.08 times more return on investment than Kinetics Spin-off. However, Transamerica Intermediate Muni is 12.01 times less risky than Kinetics Spin-off. It trades about -0.38 of its potential returns per unit of risk. Kinetics Spin Off And is currently generating about -0.13 per unit of risk. If you would invest  1,092  in Transamerica Intermediate Muni on October 10, 2024 and sell it today you would lose (20.00) from holding Transamerica Intermediate Muni or give up 1.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Transamerica Intermediate Muni  vs.  Kinetics Spin Off And

Transamerica Intermediate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kinetics Spin Off

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Spin Off And are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Kinetics Spin-off showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Transamerica Intermediate and Kinetics Spin-off

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

The idea behind Transamerica Intermediate Muni and Kinetics Spin Off And 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.