Correlation Between Kinetics Market and Ab Global

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

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

Diversification Opportunities for Kinetics Market and Ab Global

-0.13

Correlation Coefficient

Kinetics Market  Ab Global

Good diversification

The 3 months correlation between Kinetics and CBSYX is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Ab Global Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Risk and Kinetics Market 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 Market Opportunities are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Risk has no effect on the direction of Kinetics Market i.e., Kinetics Market and Ab Global go up and down completely randomly.

Pair Corralation between Kinetics Market and Ab Global

Assuming the 90 days horizon Kinetics Market Opportunities is expected to under-perform the Ab Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Kinetics Market Opportunities is 1.18 times less risky than Ab Global. The mutual fund trades about -0.44 of its potential returns per unit of risk. The Ab Global Risk is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest  1,787  in Ab Global Risk on September 23, 2024 and sell it today you would lose (271.00) from holding Ab Global Risk or give up 15.17% of portfolio value over 90 days.

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

Kinetics Market Opportunities  vs.  Ab Global Risk

Kinetics Market Oppo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Kinetics Market showed solid returns over the last few months and may actually be approaching a breakup point.

Ab Global Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Global Risk 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 basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Kinetics Market and Ab Global

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

The idea behind Kinetics Market Opportunities and Ab Global Risk 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..