Correlation Between Horizon Kinetics and Avantis Small
Can any of the company-specific risk be diversified away by investing in both Horizon Kinetics and Avantis Small 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 Kinetics and Avantis Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Kinetics Inflation and Avantis Small Cap, you can compare the effects of market volatilities on Horizon Kinetics and Avantis Small 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 Kinetics with a short position of Avantis Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Kinetics and Avantis Small.
Diversification Opportunities for Horizon Kinetics and Avantis Small
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Horizon and Avantis is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics Inflation and Avantis Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Small Cap and Horizon Kinetics 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 Kinetics Inflation are associated (or correlated) with Avantis Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Small Cap has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and Avantis Small go up and down completely randomly.
Pair Corralation between Horizon Kinetics and Avantis Small
Given the investment horizon of 90 days Horizon Kinetics is expected to generate 1.65 times less return on investment than Avantis Small. But when comparing it to its historical volatility, Horizon Kinetics Inflation is 1.62 times less risky than Avantis Small. It trades about 0.25 of its potential returns per unit of risk. Avantis Small Cap is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 9,498 in Avantis Small Cap on September 5, 2024 and sell it today you would earn a total of 1,006 from holding Avantis Small Cap or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Kinetics Inflation vs. Avantis Small Cap
Performance |
| Timeline |
| Horizon Kinetics Inf |
| Avantis Small Cap |
Horizon Kinetics and Avantis Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Kinetics and Avantis Small
The main advantage of trading using opposite Horizon Kinetics and Avantis Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Kinetics position performs unexpectedly, Avantis Small 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 Avantis Small will offset losses from the drop in Avantis Small's long position.| Horizon Kinetics vs. Quadratic Interest Rate | Horizon Kinetics vs. Simplify Interest Rate | Horizon Kinetics vs. iShares Small Cap | Horizon Kinetics vs. Freedom 100 Emerging |
| Avantis Small vs. Horizon Kinetics Inflation | Avantis Small vs. Virtus ETF Trust | Avantis Small vs. iShares MSCI USA | Avantis Small vs. Pacer Cash Cows |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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