Correlation Between Kinetics Paradigm and Marsico International

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

Diversification Opportunities for Kinetics Paradigm and Marsico International

0.64

Correlation Coefficient

Kinetics Paradigm  Marsico International

Poor diversification

The 3 months correlation between Kinetics and Marsico is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Marsico International Opportun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico International 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 Marsico International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsico International has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Marsico International go up and down completely randomly.

Pair Corralation between Kinetics Paradigm and Marsico International

Assuming the 90 days horizon Kinetics Paradigm Fund is expected to generate 1.79 times more return on investment than Marsico International. However, Kinetics Paradigm is 1.79 times more volatile than Marsico International Opportunities. It trades about 0.08 of its potential returns per unit of risk. Marsico International Opportunities is currently generating about 0.03 per unit of risk. If you would invest  13,421  in Kinetics Paradigm Fund on December 30, 2024 and sell it today you would earn a total of  1,477  from holding Kinetics Paradigm Fund or generate 11.01% return on investment over 90 days.

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

Kinetics Paradigm Fund  vs.  Marsico International Opportun

Kinetics Paradigm

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Paradigm Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kinetics Paradigm may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Marsico International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico International Opportunities are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Marsico International 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 Marsico International

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

The idea behind Kinetics Paradigm Fund and Marsico International Opportunities 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.