Correlation Between Invesco SP and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both Invesco SP 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 SP 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 SP 500 and Horizon Kinetics Medical, you can compare the effects of market volatilities on Invesco SP 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 SP with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Horizon Kinetics.
Diversification Opportunities for Invesco SP and Horizon Kinetics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Horizon is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 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 SP 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 SP 500 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 SP i.e., Invesco SP and Horizon Kinetics go up and down completely randomly.
Pair Corralation between Invesco SP and Horizon Kinetics
Given the investment horizon of 90 days Invesco SP 500 is expected to generate 0.68 times more return on investment than Horizon Kinetics. However, Invesco SP 500 is 1.48 times less risky than Horizon Kinetics. It trades about 0.08 of its potential returns per unit of risk. Horizon Kinetics Medical is currently generating about -0.11 per unit of risk. If you would invest 3,086 in Invesco SP 500 on September 2, 2024 and sell it today you would earn a total of 36.00 from holding Invesco SP 500 or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP 500 vs. Horizon Kinetics Medical
Performance |
| Timeline |
| Invesco SP 500 |
| Horizon Kinetics Medical |
Invesco SP and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and Horizon Kinetics
The main advantage of trading using opposite Invesco SP and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP 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 SP vs. First Trust Exchange Traded | Invesco SP vs. Ultimus Managers Trust | Invesco SP vs. Horizon Kinetics Medical | Invesco SP vs. Harbor Health Care |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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