Correlation Between Kinetics Small and Columbia Porate

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

By analyzing existing cross correlation between Kinetics Small Cap and Columbia Porate Income, you can compare the effects of market volatilities on Kinetics Small and Columbia Porate 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 Small with a short position of Columbia Porate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Columbia Porate.

Diversification Opportunities for Kinetics Small and Columbia Porate

-0.21

Correlation Coefficient

Kinetics Small  Columbia Porate

Very good diversification

The 3 months correlation between Kinetics and Columbia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Columbia Porate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Porate Income and Kinetics Small 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 Small Cap are associated (or correlated) with Columbia Porate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Porate Income has no effect on the direction of Kinetics Small i.e., Kinetics Small and Columbia Porate go up and down completely randomly.

Pair Corralation between Kinetics Small and Columbia Porate

If you would invest  15,810  in Kinetics Small Cap on September 19, 2024 and sell it today you would earn a total of  3,205  from holding Kinetics Small Cap or generate 20.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Kinetics Small Cap  vs.  Columbia Porate Income

Kinetics Small Cap

Risk-Adjusted Performance

10 of 100

OK

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

Columbia Porate Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Porate Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Columbia Porate 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 Small and Columbia Porate

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

The idea behind Kinetics Small Cap and Columbia Porate Income 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.