Correlation Between Kinetics Global and Us Global

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

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

Diversification Opportunities for Kinetics Global and Us Global

0.24

Correlation Coefficient

Kinetics Global  Us Global

Modest diversification

The 3 months correlation between Kinetics and USGLX is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Us Global Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Global Leaders and Kinetics Global 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 Global Fund are associated (or correlated) with Us Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Global Leaders has no effect on the direction of Kinetics Global i.e., Kinetics Global and Us Global go up and down completely randomly.

Pair Corralation between Kinetics Global and Us Global

Assuming the 90 days horizon Kinetics Global Fund is expected to generate 0.69 times more return on investment than Us Global. However, Kinetics Global Fund is 1.45 times less risky than Us Global. It trades about -0.1 of its potential returns per unit of risk. Us Global Leaders is currently generating about -0.14 per unit of risk. If you would invest  1,792  in Kinetics Global Fund on November 28, 2024 and sell it today you would lose (142.00) from holding Kinetics Global Fund or give up 7.92% of portfolio value over 90 days.

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

Kinetics Global Fund  vs.  Us Global Leaders

Kinetics Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetics Global Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Us Global Leaders

Risk-Adjusted Performance

Very Weak

Over the last 90 days Us Global Leaders has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Kinetics Global and Us Global

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

The idea behind Kinetics Global Fund and Us Global Leaders 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.