Correlation Between Kinetics Paradigm and Dana Epiphany

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

Diversification Opportunities for Kinetics Paradigm and Dana Epiphany

0.23

Correlation Coefficient

Kinetics Paradigm  Dana Epiphany

Modest diversification

The 3 months correlation between Kinetics and Dana is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Dana Epiphany Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Epiphany Esg 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 Dana Epiphany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Epiphany Esg has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Dana Epiphany go up and down completely randomly.

Pair Corralation between Kinetics Paradigm and Dana Epiphany

Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 2.37 times more return on investment than Dana Epiphany. However, Kinetics Paradigm is 2.37 times more volatile than Dana Epiphany Esg. It trades about 0.1 of its potential returns per unit of risk. Dana Epiphany Esg is currently generating about -0.07 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kinetics Paradigm Fund  vs.  Dana Epiphany Esg

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.

Dana Epiphany Esg

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dana Epiphany Esg has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Dana Epiphany 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 Dana Epiphany

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

The idea behind Kinetics Paradigm Fund and Dana Epiphany Esg 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.