Correlation Between Invesco DWA and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both Invesco DWA 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 Invesco DWA and Horizon Kinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco DWA Consumer and Horizon Kinetics Medical, you can compare the effects of market volatilities on Invesco DWA 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 Invesco DWA with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco DWA and Horizon Kinetics.
Diversification Opportunities for Invesco DWA and Horizon Kinetics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Horizon is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Invesco DWA Consumer 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 Invesco DWA 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 Invesco DWA Consumer 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 Invesco DWA i.e., Invesco DWA and Horizon Kinetics go up and down completely randomly.
Pair Corralation between Invesco DWA and Horizon Kinetics
Considering the 90-day investment horizon Invesco DWA Consumer is expected to generate 0.86 times more return on investment than Horizon Kinetics. However, Invesco DWA Consumer is 1.16 times less risky than Horizon Kinetics. It trades about 0.07 of its potential returns per unit of risk. Horizon Kinetics Medical is currently generating about -0.02 per unit of risk. If you would invest 8,275 in Invesco DWA Consumer on October 7, 2024 and sell it today you would earn a total of 2,316 from holding Invesco DWA Consumer or generate 27.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
Invesco DWA Consumer vs. Horizon Kinetics Medical
Performance |
| Timeline |
| Invesco DWA Consumer |
| Horizon Kinetics Medical |
Invesco DWA and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco DWA and Horizon Kinetics
The main advantage of trading using opposite Invesco DWA and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco DWA 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.| Invesco DWA vs. Invesco DWA Consumer | Invesco DWA vs. Invesco DWA Basic | Invesco DWA vs. Invesco DWA Industrials | Invesco DWA vs. Invesco DWA Utilities |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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