Correlation Between IShares Core and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and Horizon Kinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and Horizon Kinetics Medical, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Horizon Kinetics.
Diversification Opportunities for IShares Core and Horizon Kinetics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Horizon is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Horizon Kinetics Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Kinetics Medical and IShares Core 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 iShares Core MSCI 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 Medical has no effect on the direction of IShares Core i.e., IShares Core and Horizon Kinetics go up and down completely randomly.
Pair Corralation between IShares Core and Horizon Kinetics
Given the investment horizon of 90 days iShares Core MSCI is expected to generate 0.66 times more return on investment than Horizon Kinetics. However, iShares Core MSCI is 1.52 times less risky than Horizon Kinetics. It trades about -0.09 of its potential returns per unit of risk. Horizon Kinetics Medical is currently generating about -0.16 per unit of risk. If you would invest 6,777 in iShares Core MSCI on August 31, 2024 and sell it today you would lose (98.00) from holding iShares Core MSCI or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Horizon Kinetics Medical
Performance |
| Timeline |
| iShares Core MSCI |
| Horizon Kinetics Medical |
IShares Core and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Horizon Kinetics
The main advantage of trading using opposite IShares Core and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. Horizon Kinetics Medical | IShares Core vs. Genenta Science SpA | IShares Core vs. ESSA Pharma | IShares Core vs. Inogen Inc |
| Horizon Kinetics vs. Harbor Health Care | Horizon Kinetics vs. Myriad Genetics | Horizon Kinetics vs. Genenta Science SpA |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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