Correlation Between NYSE Composite and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kinetics Small 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 NYSE Composite and Kinetics Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kinetics Small Cap, you can compare the effects of market volatilities on NYSE Composite and Kinetics Small 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 NYSE Composite with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kinetics Small.
Diversification Opportunities for NYSE Composite and Kinetics Small
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Kinetics is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and NYSE Composite 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 NYSE Composite are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kinetics Small go up and down completely randomly.
Pair Corralation between NYSE Composite and Kinetics Small
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.1 times less return on investment than Kinetics Small. But when comparing it to its historical volatility, NYSE Composite is 2.54 times less risky than Kinetics Small. It trades about 0.29 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 11,227 in Kinetics Small Cap on February 22, 2024 and sell it today you would earn a total of 427.00 from holding Kinetics Small Cap or generate 3.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Kinetics Small Cap
Performance |
Timeline |
NYSE Composite and Kinetics Small Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kinetics Small Cap
Pair trading matchups for Kinetics Small
Pair Trading with NYSE Composite and Kinetics Small
The main advantage of trading using opposite NYSE Composite and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kinetics Small 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 Kinetics Small will offset losses from the drop in Kinetics Small's long position.NYSE Composite vs. Chipotle Mexican Grill | NYSE Composite vs. Shake Shack | NYSE Composite vs. Starbucks | NYSE Composite vs. Parker Hannifin |
Kinetics Small vs. The Hartford Midcap | Kinetics Small vs. Mfs Emerging Markets | Kinetics Small vs. Wells Fargo Special | Kinetics Small vs. Washington Mutual Investors |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |