Correlation Between Kinetics Small and Wealthbuilder Moderate

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

Diversification Opportunities for Kinetics Small and Wealthbuilder Moderate

-0.83

Correlation Coefficient

Kinetics Small  Wealthbuilder Moderate

Pay attention - limited upside

The 3 months correlation between Kinetics and Wealthbuilder is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Wealthbuilder Moderate Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wealthbuilder Moderate 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 Wealthbuilder Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wealthbuilder Moderate has no effect on the direction of Kinetics Small i.e., Kinetics Small and Wealthbuilder Moderate go up and down completely randomly.

Pair Corralation between Kinetics Small and Wealthbuilder Moderate

Assuming the 90 days horizon Kinetics Small Cap is expected to under-perform the Wealthbuilder Moderate. In addition to that, Kinetics Small is 3.54 times more volatile than Wealthbuilder Moderate Balanced. It trades about -0.29 of its total potential returns per unit of risk. Wealthbuilder Moderate Balanced is currently generating about 0.2 per unit of volatility. If you would invest  1,033  in Wealthbuilder Moderate Balanced on May 19, 2025 and sell it today you would earn a total of  47.00  from holding Wealthbuilder Moderate Balanced or generate 4.55% return on investment over 90 days.

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

Kinetics Small Cap  vs.  Wealthbuilder Moderate Balance

Kinetics Small Cap

Risk-Adjusted Performance

Weakest

Over the last 90 days Kinetics Small Cap 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 September 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Wealthbuilder Moderate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wealthbuilder Moderate Balanced are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Wealthbuilder Moderate 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 Small and Wealthbuilder Moderate

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

The idea behind Kinetics Small Cap and Wealthbuilder Moderate Balanced 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.