Correlation Between Great West and Kinetics Small

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

By analyzing existing cross correlation between Great West Inflation Protected Securities and Kinetics Small Cap, you can compare the effects of market volatilities on Great West and Kinetics Small 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 Great West with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Kinetics Small.

Diversification Opportunities for Great West and Kinetics Small

-0.79

Correlation Coefficient

Great West  Kinetics Small

Pay attention - limited upside

The 3 months correlation between Great and Kinetics is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Great West Inflation Protected and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and Great West 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 Great West Inflation Protected Securities are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Great West i.e., Great West and Kinetics Small go up and down completely randomly.

Pair Corralation between Great West and Kinetics Small

Assuming the 90 days horizon Great West Inflation Protected Securities is expected to generate 0.16 times more return on investment than Kinetics Small. However, Great West Inflation Protected Securities is 6.43 times less risky than Kinetics Small. It trades about 0.18 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about -0.19 per unit of risk. If you would invest  919.00  in Great West Inflation Protected Securities on May 5, 2025 and sell it today you would earn a total of  20.00  from holding Great West Inflation Protected Securities or generate 2.18% return on investment over 90 days.

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

Great West Inflation Protected  vs.  Kinetics Small Cap

Great West Inflation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Inflation Protected Securities are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Great West is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 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.

Pair Trading with Great West and Kinetics Small

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

The idea behind Great West Inflation Protected Securities and Kinetics Small Cap 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.