Correlation Between Kinetics Paradigm and Cibc Atlas

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

By analyzing existing cross correlation between Kinetics Paradigm Fund and Cibc Atlas All, you can compare the effects of market volatilities on Kinetics Paradigm and Cibc Atlas 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 Kinetics Paradigm with a short position of Cibc Atlas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Cibc Atlas.

Diversification Opportunities for Kinetics Paradigm and Cibc Atlas

0.11

Correlation Coefficient

Kinetics Paradigm  Cibc Atlas

Average diversification

The 3 months correlation between Kinetics and Cibc is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Cibc Atlas All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibc Atlas All and Kinetics Paradigm 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 Kinetics Paradigm Fund are associated (or correlated) with Cibc Atlas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibc Atlas All has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Cibc Atlas go up and down completely randomly.

Pair Corralation between Kinetics Paradigm and Cibc Atlas

Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.84 times more return on investment than Cibc Atlas. However, Kinetics Paradigm is 1.84 times more volatile than Cibc Atlas All. It trades about 0.1 of its potential returns per unit of risk. Cibc Atlas All is currently generating about -0.08 per unit of risk. If you would invest  13,421  in Kinetics Paradigm Fund on December 29, 2024 and sell it today you would earn a total of  1,834  from holding Kinetics Paradigm Fund or generate 13.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Kinetics Paradigm Fund  vs.  Cibc Atlas All

Kinetics Paradigm

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Paradigm Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kinetics Paradigm showed solid returns over the last few months and may actually be approaching a breakup point.

Cibc Atlas All

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cibc Atlas All has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward 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 Kinetics Paradigm and Cibc Atlas

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

The idea behind Kinetics Paradigm Fund and Cibc Atlas All 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.