Correlation Between Kinetics Market and Pimco Investment

Can any of the company-specific risk be diversified away by investing in both Kinetics Market and Pimco Investment 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 Market and Pimco Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinetics Market Opportunities and Pimco Investment Grade, you can compare the effects of market volatilities on Kinetics Market and Pimco Investment 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 Market with a short position of Pimco Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Market and Pimco Investment.

Diversification Opportunities for Kinetics Market and Pimco Investment

-0.76

Correlation Coefficient

Kinetics Market  Pimco Investment

Pay attention - limited upside

The 3 months correlation between Kinetics and Pimco is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Market Opportunities and Pimco Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Investment Grade and Kinetics Market 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 Market Opportunities are associated (or correlated) with Pimco Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Investment Grade has no effect on the direction of Kinetics Market i.e., Kinetics Market and Pimco Investment go up and down completely randomly.

Pair Corralation between Kinetics Market and Pimco Investment

Assuming the 90 days horizon Kinetics Market Opportunities is expected to generate 5.36 times more return on investment than Pimco Investment. However, Kinetics Market is 5.36 times more volatile than Pimco Investment Grade. It trades about 0.23 of its potential returns per unit of risk. Pimco Investment Grade is currently generating about 0.06 per unit of risk. If you would invest  4,053  in Kinetics Market Opportunities on August 28, 2024 and sell it today you would earn a total of  5,420  from holding Kinetics Market Opportunities or generate 133.73% return on investment over 90 days.

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

Kinetics Market Opportunities  vs.  Pimco Investment Grade

Kinetics Market Oppo

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kinetics Market showed solid returns over the last few months and may actually be approaching a breakup point.

Pimco Investment Grade

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Investment Grade has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco Investment 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 Market and Pimco Investment

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

The idea behind Kinetics Market Opportunities and Pimco Investment Grade 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.