Correlation Between Kinetics Global and Multi Manager

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

Diversification Opportunities for Kinetics Global and Multi Manager

0.89

Correlation Coefficient

Kinetics Global  Multi Manager

Very poor diversification

The 3 months correlation between Kinetics and Multi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Multi Manager Growth Strategie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Growth 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 Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Growth has no effect on the direction of Kinetics Global i.e., Kinetics Global and Multi Manager go up and down completely randomly.

Pair Corralation between Kinetics Global and Multi Manager

Assuming the 90 days horizon Kinetics Global Fund is expected to under-perform the Multi Manager. But the mutual fund apears to be less risky and, when comparing its historical volatility, Kinetics Global Fund is 1.11 times less risky than Multi Manager. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Multi Manager Growth Strategies is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,163  in Multi Manager Growth Strategies on September 27, 2024 and sell it today you would lose (30.00) from holding Multi Manager Growth Strategies or give up 1.39% of portfolio value over 90 days.

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

Kinetics Global Fund  vs.  Multi Manager Growth Strategie

Kinetics Global

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Kinetics Global showed solid returns over the last few months and may actually be approaching a breakup point.

Multi Manager Growth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Manager Growth Strategies are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Multi Manager 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 Global and Multi Manager

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

The idea behind Kinetics Global Fund and Multi Manager Growth Strategies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.