Correlation Between Horizon Technology and China Fund
Can any of the company-specific risk be diversified away by investing in both Horizon Technology and China Fund 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 Technology and China Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Technology Finance and China Fund, you can compare the effects of market volatilities on Horizon Technology and China Fund 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 Technology with a short position of China Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Technology and China Fund.
Diversification Opportunities for Horizon Technology and China Fund
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Horizon and China is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and China Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Fund and Horizon Technology 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 Technology Finance are associated (or correlated) with China Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Fund has no effect on the direction of Horizon Technology i.e., Horizon Technology and China Fund go up and down completely randomly.
Pair Corralation between Horizon Technology and China Fund
Given the investment horizon of 90 days Horizon Technology Finance is expected to generate 0.57 times more return on investment than China Fund. However, Horizon Technology Finance is 1.76 times less risky than China Fund. It trades about -0.27 of its potential returns per unit of risk. China Fund is currently generating about -0.19 per unit of risk. If you would invest 1,001 in Horizon Technology Finance on August 28, 2024 and sell it today you would lose (75.00) from holding Horizon Technology Finance or give up 7.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Technology Finance vs. China Fund
Performance |
| Timeline |
| Horizon Technology |
| China Fund |
Horizon Technology and China Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Technology and China Fund
The main advantage of trading using opposite Horizon Technology and China Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Technology position performs unexpectedly, China Fund 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 China Fund will offset losses from the drop in China Fund's long position.| Horizon Technology vs. Gladstone Capital | Horizon Technology vs. Gladstone Investment | Horizon Technology vs. Prospect Capital | Horizon Technology vs. Stellus Capital Investment |
| China Fund vs. Ashmore Group Plc | China Fund vs. Mexico Equity And | China Fund vs. Western Asset Managed | China Fund vs. Blackrock Muniholdings Quality |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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