Correlation Between Kinetics Internet and First Trust
Can any of the company-specific risk be diversified away by investing in both Kinetics Internet and First Trust 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 Internet and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Internet Fund and First Trust Short, you can compare the effects of market volatilities on Kinetics Internet and First Trust 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 Internet with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Internet and First Trust.
Diversification Opportunities for Kinetics Internet and First Trust
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and First is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Internet Fund and First Trust Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Short and Kinetics Internet 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 Internet Fund are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Short has no effect on the direction of Kinetics Internet i.e., Kinetics Internet and First Trust go up and down completely randomly.
Pair Corralation between Kinetics Internet and First Trust
Assuming the 90 days horizon Kinetics Internet Fund is expected to generate 8.49 times more return on investment than First Trust. However, Kinetics Internet is 8.49 times more volatile than First Trust Short. It trades about 0.16 of its potential returns per unit of risk. First Trust Short is currently generating about 0.42 per unit of risk. If you would invest 10,020 in Kinetics Internet Fund on April 19, 2025 and sell it today you would earn a total of 1,420 from holding Kinetics Internet Fund or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Internet Fund vs. First Trust Short
Performance |
| Timeline |
| Kinetics Internet |
| First Trust Short |
Kinetics Internet and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Internet and First Trust
The main advantage of trading using opposite Kinetics Internet and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Internet position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Kinetics Internet vs. Victory Munder Multi Cap | Kinetics Internet vs. Tomorrows Scholar College | Kinetics Internet vs. Janus Global Technology | Kinetics Internet vs. Invesco Technology Fund |
| First Trust vs. Transamerica Asset Allocation | First Trust vs. Mutual Of America | First Trust vs. Voya Target Retirement | First Trust vs. Columbia Moderate Growth |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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