Correlation Between Kinetics Small and Jacob Internet

Can any of the company-specific risk be diversified away by investing in both Kinetics Small and Jacob Internet 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 Jacob Internet 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 Jacob Internet Fund, you can compare the effects of market volatilities on Kinetics Small and Jacob Internet 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 Jacob Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Jacob Internet.

Diversification Opportunities for Kinetics Small and Jacob Internet

-0.76

Correlation Coefficient

Kinetics Small  Jacob Internet

Pay attention - limited upside

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

Pair Corralation between Kinetics Small and Jacob Internet

Assuming the 90 days horizon Kinetics Small Cap is expected to under-perform the Jacob Internet. But the mutual fund apears to be less risky and, when comparing its historical volatility, Kinetics Small Cap is 1.37 times less risky than Jacob Internet. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Jacob Internet Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  543.00  in Jacob Internet Fund on May 3, 2025 and sell it today you would earn a total of  134.00  from holding Jacob Internet Fund or generate 24.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Kinetics Small Cap  vs.  Jacob Internet Fund

Kinetics Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetics Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Jacob Internet

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jacob Internet Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jacob Internet showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinetics Small and Jacob Internet

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

The idea behind Kinetics Small Cap and Jacob Internet 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.