Correlation Between Kinetics Paradigm and Doubleline Emerging

Can any of the company-specific risk be diversified away by investing in both Kinetics Paradigm and Doubleline Emerging 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 Doubleline Emerging 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 Doubleline Emerging Markets, you can compare the effects of market volatilities on Kinetics Paradigm and Doubleline Emerging 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 Doubleline Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Doubleline Emerging.

Diversification Opportunities for Kinetics Paradigm and Doubleline Emerging

0.1

Correlation Coefficient

Kinetics Paradigm  Doubleline Emerging

Average diversification

The 3 months correlation between Kinetics and DOUBLELINE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Doubleline Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Emerging 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 Doubleline Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Emerging has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Doubleline Emerging go up and down completely randomly.

Pair Corralation between Kinetics Paradigm and Doubleline Emerging

Assuming the 90 days horizon Kinetics Paradigm Fund is expected to under-perform the Doubleline Emerging. In addition to that, Kinetics Paradigm is 17.26 times more volatile than Doubleline Emerging Markets. It trades about -0.04 of its total potential returns per unit of risk. Doubleline Emerging Markets is currently generating about 0.16 per unit of volatility. If you would invest  892.00  in Doubleline Emerging Markets on December 2, 2024 and sell it today you would earn a total of  13.00  from holding Doubleline Emerging Markets or generate 1.46% return on investment over 90 days.

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

Kinetics Paradigm Fund  vs.  Doubleline Emerging Markets

Kinetics Paradigm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetics Paradigm Fund 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.

Doubleline Emerging

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Doubleline Emerging Markets are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Doubleline Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kinetics Paradigm and Doubleline Emerging

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

The idea behind Kinetics Paradigm Fund and Doubleline Emerging Markets 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.