Correlation Between Kinetics Small and Consumer Discretionary
Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Consumer Discretionary 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 Consumer Discretionary 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 Consumer Discretionary Portfolio, you can compare the effects of market volatilities on Kinetics Small and Consumer Discretionary 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 Consumer Discretionary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Consumer Discretionary.
Diversification Opportunities for Kinetics Small and Consumer Discretionary
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kinetics and Consumer is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Consumer Discretionary Portfol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Discretionary 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 Consumer Discretionary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Discretionary has no effect on the direction of Kinetics Small i.e., Kinetics Small and Consumer Discretionary go up and down completely randomly.
Pair Corralation between Kinetics Small and Consumer Discretionary
Assuming the 90 days horizon Kinetics Small Cap is expected to under-perform the Consumer Discretionary. In addition to that, Kinetics Small is 1.24 times more volatile than Consumer Discretionary Portfolio. It trades about -0.03 of its total potential returns per unit of risk. Consumer Discretionary Portfolio is currently generating about 0.12 per unit of volatility. If you would invest 6,515 in Consumer Discretionary Portfolio on October 10, 2025 and sell it today you would earn a total of 532.00 from holding Consumer Discretionary Portfolio or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Consumer Discretionary Portfol
Performance |
| Timeline |
| Kinetics Small Cap |
| Consumer Discretionary |
Kinetics Small and Consumer Discretionary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Consumer Discretionary
The main advantage of trading using opposite Kinetics Small and Consumer Discretionary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small position performs unexpectedly, Consumer Discretionary 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 Consumer Discretionary will offset losses from the drop in Consumer Discretionary's long position.| Kinetics Small vs. Pimco High Yield | Kinetics Small vs. American Beacon Stephens | Kinetics Small vs. Consumer Discretionary Portfolio | Kinetics Small vs. International Equity Portfolio |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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