Correlation Between Innovator ETFs and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs 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 Innovator ETFs and Horizon Kinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator ETFs Trust and Horizon Kinetics Inflation, you can compare the effects of market volatilities on Innovator ETFs 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 Innovator ETFs with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and Horizon Kinetics.
Diversification Opportunities for Innovator ETFs and Horizon Kinetics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Innovator and Horizon is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and Horizon Kinetics Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Kinetics Inf and Innovator ETFs 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 Innovator ETFs Trust 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 Inf has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and Horizon Kinetics go up and down completely randomly.
Pair Corralation between Innovator ETFs and Horizon Kinetics
Given the investment horizon of 90 days Innovator ETFs is expected to generate 3.91 times less return on investment than Horizon Kinetics. But when comparing it to its historical volatility, Innovator ETFs Trust is 1.38 times less risky than Horizon Kinetics. It trades about 0.09 of its potential returns per unit of risk. Horizon Kinetics Inflation is currently generating about 0.26 of returns per unit of risk over similar time horizon. 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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Innovator ETFs Trust vs. Horizon Kinetics Inflation
Performance |
| Timeline |
| Innovator ETFs Trust |
| Horizon Kinetics Inf |
Innovator ETFs and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and Horizon Kinetics
The main advantage of trading using opposite Innovator ETFs and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs 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.| Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator Growth Accelerated | Innovator ETFs vs. Innovator Growth 100 Accelerated | Innovator ETFs vs. Innovator ETFs Trust |
| Horizon Kinetics vs. Quadratic Interest Rate | Horizon Kinetics vs. Simplify Interest Rate | Horizon Kinetics vs. iShares Small Cap | Horizon Kinetics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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