Correlation Between Horizon Kinetics and IShares MSCI
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 USA, 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
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Horizon and IShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics Inflation and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA 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 USA 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 1.77 times more return on investment than IShares MSCI. However, Horizon Kinetics is 1.77 times more volatile than iShares MSCI USA. It trades about -0.05 of its potential returns per unit of risk. iShares MSCI USA is currently generating about -0.13 per unit of risk. If you would invest 4,086 in Horizon Kinetics Inflation on September 13, 2024 and sell it today you would lose (54.00) from holding Horizon Kinetics Inflation or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Kinetics Inflation vs. iShares MSCI USA
Performance |
| Timeline |
| Horizon Kinetics Inf |
| iShares MSCI USA |
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.| Horizon Kinetics vs. Quadratic Interest Rate | Horizon Kinetics vs. Simplify Interest Rate | Horizon Kinetics vs. iShares Small Cap | Horizon Kinetics vs. Freedom 100 Emerging |
| IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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