Correlation Between Marsico 21st and Kinetics Small

Can any of the company-specific risk be diversified away by investing in both Marsico 21st 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 Marsico 21st and Kinetics Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marsico 21st Century and Kinetics Small Cap, you can compare the effects of market volatilities on Marsico 21st 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 Marsico 21st with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico 21st and Kinetics Small.

Diversification Opportunities for Marsico 21st and Kinetics Small

-0.85

Correlation Coefficient

Marsico 21st  Kinetics Small

Pay attention - limited upside

The 3 months correlation between Marsico and Kinetics is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Marsico 21st Century 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 Marsico 21st 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 Marsico 21st Century 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 Marsico 21st i.e., Marsico 21st and Kinetics Small go up and down completely randomly.

Pair Corralation between Marsico 21st and Kinetics Small

Assuming the 90 days horizon Marsico 21st Century is expected to generate 0.71 times more return on investment than Kinetics Small. However, Marsico 21st Century is 1.41 times less risky than Kinetics Small. It trades about 0.29 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about -0.16 per unit of risk. If you would invest  5,241  in Marsico 21st Century on May 3, 2025 and sell it today you would earn a total of  840.00  from holding Marsico 21st Century or generate 16.03% return on investment over 90 days.

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

Marsico 21st Century  vs.  Kinetics Small Cap

Marsico 21st Century

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico 21st Century are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Marsico 21st showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Marsico 21st and Kinetics Small

The main advantage of trading using opposite Marsico 21st and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marsico 21st 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 Marsico 21st Century 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.