Correlation Between Kinetics Paradigm and Tocqueville International

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

Diversification Opportunities for Kinetics Paradigm and Tocqueville International

-0.74

Correlation Coefficient

Kinetics Paradigm  Tocqueville International

Pay attention - limited upside

The 3 months correlation between Kinetics and Tocqueville is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and The Tocqueville International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tocqueville 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 Tocqueville International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tocqueville International has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Tocqueville International go up and down completely randomly.

Pair Corralation between Kinetics Paradigm and Tocqueville International

Assuming the 90 days horizon Kinetics Paradigm Fund is expected to under-perform the Tocqueville International. In addition to that, Kinetics Paradigm is 6.04 times more volatile than The Tocqueville International. It trades about -0.08 of its total potential returns per unit of risk. The Tocqueville International is currently generating about 0.18 per unit of volatility. If you would invest  1,751  in The Tocqueville International on September 16, 2024 and sell it today you would earn a total of  43.00  from holding The Tocqueville International or generate 2.46% return on investment over 90 days.

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

Kinetics Paradigm Fund  vs.  The Tocqueville International

Kinetics Paradigm

Risk-Adjusted Performance

15 of 100

Good

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

Tocqueville International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Tocqueville International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Tocqueville 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 Tocqueville International

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

The idea behind Kinetics Paradigm Fund and The Tocqueville International 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.