Correlation Between Global X and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both Global X and Horizon Kinetics 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 Global X and Horizon Kinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X CleanTech and Horizon Kinetics Inflation, you can compare the effects of market volatilities on Global X and Horizon Kinetics 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 Global X with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Horizon Kinetics.
Diversification Opportunities for Global X and Horizon Kinetics
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Horizon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global X CleanTech and Horizon Kinetics Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Kinetics Inf and Global X 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 Global X CleanTech are associated (or correlated) with Horizon Kinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Kinetics Inf has no effect on the direction of Global X i.e., Global X and Horizon Kinetics go up and down completely randomly.
Pair Corralation between Global X and Horizon Kinetics
Given the investment horizon of 90 days Global X CleanTech is expected to under-perform the Horizon Kinetics. In addition to that, Global X is 2.3 times more volatile than Horizon Kinetics Inflation. It trades about -0.07 of its total potential returns per unit of risk. Horizon Kinetics Inflation is currently generating about 0.07 per unit of volatility. If you would invest 2,942 in Horizon Kinetics Inflation on November 19, 2024 and sell it today you would earn a total of 1,077 from holding Horizon Kinetics Inflation or generate 36.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X CleanTech vs. Horizon Kinetics Inflation
Performance |
| Timeline |
| Global X CleanTech |
| Horizon Kinetics Inf |
Global X and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Horizon Kinetics
The main advantage of trading using opposite Global X and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Horizon Kinetics 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 Horizon Kinetics will offset losses from the drop in Horizon Kinetics' long position.| Global X vs. Global X Telemedicine | Global X vs. ALPS Clean Energy | Global X vs. Global X Renewable | Global X vs. SPDR Kensho Clean |
| Horizon Kinetics vs. Quadratic Interest Rate | Horizon Kinetics vs. Simplify Interest Rate | Horizon Kinetics vs. iShares Small Cap | Horizon Kinetics vs. Freedom 100 Emerging |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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