Correlation Between Kinetics Global and American Balanced

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Kinetics Global and American Balanced 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 American Balanced 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 American Balanced Fund, you can compare the effects of market volatilities on Kinetics Global and American Balanced 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 American Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Global and American Balanced.

Diversification Opportunities for Kinetics Global and American Balanced

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Kinetics and American is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding KINETICS GLOBAL FUND and AMERICAN BALANCED FUND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Balanced Fund 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 American Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Balanced Fund has no effect on the direction of Kinetics Global i.e., Kinetics Global and American Balanced go up and down completely randomly.

Pair Corralation between Kinetics Global and American Balanced

Assuming the 90 days horizon Kinetics Global Fund is expected to generate 4.18 times more return on investment than American Balanced. However, Kinetics Global is 4.18 times more volatile than American Balanced Fund. It trades about 0.24 of its potential returns per unit of risk. American Balanced Fund is currently generating about 0.27 per unit of risk. If you would invest  1,070  in Kinetics Global Fund on December 29, 2023 and sell it today you would earn a total of  117.00  from holding Kinetics Global Fund or generate 10.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy95.65%
ValuesDaily Returns

KINETICS GLOBAL FUND  vs.  AMERICAN BALANCED FUND

 Performance 
       Timeline  
Kinetics Global Fund 

Risk-Adjusted Performance

19 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Kinetics Global showed solid returns over the last few months and may actually be approaching a breakup point.
American Balanced Fund 

Risk-Adjusted Performance

15 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in American Balanced Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, American Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinetics Global and American Balanced Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kinetics Global and American Balanced

The main advantage of trading using opposite Kinetics Global and American Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Global position performs unexpectedly, American Balanced 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 American Balanced will offset losses from the drop in American Balanced's long position.
The idea behind Kinetics Global Fund and American Balanced Fund 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.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

Other Complementary Tools

Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance