Correlation Between Kinetics Paradigm and Target Managed

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

By analyzing existing cross correlation between Kinetics Paradigm Fund and Target Managed Allocation, you can compare the effects of market volatilities on Kinetics Paradigm and Target Managed 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 Paradigm with a short position of Target Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Paradigm and Target Managed.

Diversification Opportunities for Kinetics Paradigm and Target Managed

-0.82

Correlation Coefficient

Kinetics Paradigm  Target Managed

Pay attention - limited upside

The 3 months correlation between Kinetics and Target is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Paradigm Fund and Target Managed Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Managed Allocation and Kinetics Paradigm 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 Paradigm Fund are associated (or correlated) with Target Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Managed Allocation has no effect on the direction of Kinetics Paradigm i.e., Kinetics Paradigm and Target Managed go up and down completely randomly.

Pair Corralation between Kinetics Paradigm and Target Managed

Assuming the 90 days horizon Kinetics Paradigm Fund is expected to under-perform the Target Managed. In addition to that, Kinetics Paradigm is 3.14 times more volatile than Target Managed Allocation. It trades about -0.2 of its total potential returns per unit of risk. Target Managed Allocation is currently generating about 0.19 per unit of volatility. If you would invest  1,049  in Target Managed Allocation on May 2, 2025 and sell it today you would earn a total of  60.00  from holding Target Managed Allocation or generate 5.72% return on investment over 90 days.

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

Kinetics Paradigm Fund  vs.  Target Managed Allocation

Kinetics Paradigm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetics Paradigm Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Target Managed Allocation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Target Managed Allocation are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Target Managed 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 Paradigm and Target Managed

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

The idea behind Kinetics Paradigm Fund and Target Managed Allocation 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.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.