Correlation Between Horizon Technology and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Horizon Technology and Cornerstone Strategic 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 Cornerstone Strategic 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 Cornerstone Strategic Return, you can compare the effects of market volatilities on Horizon Technology and Cornerstone Strategic 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 Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Technology and Cornerstone Strategic.
Diversification Opportunities for Horizon Technology and Cornerstone Strategic
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Horizon and Cornerstone is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Horizon Technology i.e., Horizon Technology and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Horizon Technology and Cornerstone Strategic
Given the investment horizon of 90 days Horizon Technology Finance is expected to generate 0.72 times more return on investment than Cornerstone Strategic. However, Horizon Technology Finance is 1.39 times less risky than Cornerstone Strategic. It trades about 0.25 of its potential returns per unit of risk. Cornerstone Strategic Return is currently generating about 0.13 per unit of risk. If you would invest 900.00 in Horizon Technology Finance on November 2, 2024 and sell it today you would earn a total of 34.00 from holding Horizon Technology Finance or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Technology Finance vs. Cornerstone Strategic Return
Performance |
| Timeline |
| Horizon Technology |
| Cornerstone Strategic |
Horizon Technology and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Technology and Cornerstone Strategic
The main advantage of trading using opposite Horizon Technology and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Technology position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic's long position.| Horizon Technology vs. Gladstone Capital | Horizon Technology vs. Gladstone Investment | Horizon Technology vs. Prospect Capital | Horizon Technology vs. Stellus Capital 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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