Correlation Between Horizon Kinetics and IShares MSCI

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Can any of the company-specific risk be diversified away by investing in both Horizon Kinetics and IShares MSCI 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 IShares MSCI 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 iShares MSCI Emerging, you can compare the effects of market volatilities on Horizon Kinetics and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Kinetics and IShares MSCI.

Diversification Opportunities for Horizon Kinetics and IShares MSCI

-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between Horizon and IShares is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics Inflation and iShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Emerging 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Emerging has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and IShares MSCI go up and down completely randomly.

Pair Corralation between Horizon Kinetics and IShares MSCI

Given the investment horizon of 90 days Horizon Kinetics Inflation is expected to generate 1.49 times more return on investment than IShares MSCI. However, Horizon Kinetics is 1.49 times more volatile than iShares MSCI Emerging. It trades about 0.26 of its potential returns per unit of risk. iShares MSCI Emerging is currently generating about -0.21 per unit of risk. If you would invest  4,002  in Horizon Kinetics Inflation on August 30, 2024 and sell it today you would earn a total of  263.00  from holding Horizon Kinetics Inflation or generate 6.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Horizon Kinetics Inflation  vs.  iShares MSCI Emerging

 Performance 
       Timeline  
Horizon Kinetics Inf 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics Inflation are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Horizon Kinetics disclosed solid returns over the last few months and may actually be approaching a breakup point.
iShares MSCI Emerging 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days iShares MSCI Emerging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Horizon Kinetics and IShares MSCI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Horizon Kinetics and IShares MSCI

The main advantage of trading using opposite Horizon Kinetics and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Kinetics position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.
The idea behind Horizon Kinetics Inflation and iShares MSCI Emerging pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stocks Directory module to find actively traded stocks across global markets.

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