Correlation Between Horizon Active and Firsthand Alternative
Can any of the company-specific risk be diversified away by investing in both Horizon Active and Firsthand Alternative 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 Horizon Active and Firsthand Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Active Asset and Firsthand Alternative Energy, you can compare the effects of market volatilities on Horizon Active and Firsthand Alternative 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 Horizon Active with a short position of Firsthand Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Active and Firsthand Alternative.
Diversification Opportunities for Horizon Active and Firsthand Alternative
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Horizon and Firsthand is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Active Asset and Firsthand Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Alternative and Horizon Active 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 Horizon Active Asset are associated (or correlated) with Firsthand Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Alternative has no effect on the direction of Horizon Active i.e., Horizon Active and Firsthand Alternative go up and down completely randomly.
Pair Corralation between Horizon Active and Firsthand Alternative
Assuming the 90 days horizon Horizon Active Asset is expected to generate 0.45 times more return on investment than Firsthand Alternative. However, Horizon Active Asset is 2.22 times less risky than Firsthand Alternative. It trades about 0.08 of its potential returns per unit of risk. Firsthand Alternative Energy is currently generating about 0.0 per unit of risk. If you would invest 1,389 in Horizon Active Asset on September 14, 2024 and sell it today you would earn a total of 234.00 from holding Horizon Active Asset or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Active Asset vs. Firsthand Alternative Energy
Performance |
| Timeline |
| Horizon Active Asset |
| Firsthand Alternative |
Horizon Active and Firsthand Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Active and Firsthand Alternative
The main advantage of trading using opposite Horizon Active and Firsthand Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Active position performs unexpectedly, Firsthand Alternative 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 Firsthand Alternative will offset losses from the drop in Firsthand Alternative's long position.| Horizon Active vs. Financials Ultrasector Profund | Horizon Active vs. Prudential Jennison Financial | Horizon Active vs. Blackrock Financial Institutions | Horizon Active vs. Vanguard Financials Index |
| Firsthand Alternative vs. Berkshire Focus | Firsthand Alternative vs. Red Oak Technology | Firsthand Alternative vs. Jacob Internet Fund | Firsthand Alternative vs. Kinetics Internet Fund |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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