Correlation Between Kinetics Paradigm and Macquariefirst

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

Diversification Opportunities for Kinetics Paradigm and Macquariefirst

0.0

Correlation Coefficient

Kinetics Paradigm  Macquariefirst

Pay attention - limited upside

The 3 months correlation between KINETICS and Macquariefirst is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Macquariefirst Tr Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquariefirst Tr Global 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 Macquariefirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquariefirst Tr Global has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Macquariefirst go up and down completely randomly.

Pair Corralation between Kinetics Paradigm and Macquariefirst

If you would invest (100.00) in Macquariefirst Tr Global on November 19, 2024 and sell it today you would earn a total of  100.00  from holding Macquariefirst Tr Global or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kinetics Paradigm Fund  vs.  Macquariefirst Tr Global

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 fairly strong basic indicators, Kinetics Paradigm is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Macquariefirst Tr Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macquariefirst Tr Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, Macquariefirst is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Kinetics Paradigm and Macquariefirst

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

The idea behind Kinetics Paradigm Fund and Macquariefirst Tr Global 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.