Correlation Between Horizon Kinetics and Global X
Can any of the company-specific risk be diversified away by investing in both Horizon Kinetics and Global X 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 Global X 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 Global X, you can compare the effects of market volatilities on Horizon Kinetics and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Kinetics and Global X.
Diversification Opportunities for Horizon Kinetics and Global X
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Horizon and Global is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics Inflation and Global X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and Global X go up and down completely randomly.
Pair Corralation between Horizon Kinetics and Global X
Given the investment horizon of 90 days Horizon Kinetics Inflation is expected to generate 0.49 times more return on investment than Global X. However, Horizon Kinetics Inflation is 2.04 times less risky than Global X. It trades about 0.12 of its potential returns per unit of risk. Global X is currently generating about 0.0 per unit of risk. If you would invest 2,961 in Horizon Kinetics Inflation on August 31, 2024 and sell it today you would earn a total of 1,305 from holding Horizon Kinetics Inflation or generate 44.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 8.82% |
| Values | Daily Returns |
Horizon Kinetics Inflation vs. Global X
Performance |
| Timeline |
| Horizon Kinetics Inf |
| Global X |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Horizon Kinetics and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Kinetics and Global X
The main advantage of trading using opposite Horizon Kinetics and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Kinetics position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. Quadratic Interest Rate | Global X vs. Simplify Interest Rate | Global X vs. iShares Small Cap | Global X 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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