Correlation Between SPDR SSGA and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both SPDR SSGA 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 SPDR SSGA and Horizon Kinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSGA Small and Horizon Kinetics Inflation, you can compare the effects of market volatilities on SPDR SSGA 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 SPDR SSGA with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and Horizon Kinetics.
Diversification Opportunities for SPDR SSGA and Horizon Kinetics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Horizon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA Small 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 SPDR SSGA 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 SPDR SSGA Small 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 SPDR SSGA i.e., SPDR SSGA and Horizon Kinetics go up and down completely randomly.
Pair Corralation between SPDR SSGA and Horizon Kinetics
Given the investment horizon of 90 days SPDR SSGA is expected to generate 1.15 times less return on investment than Horizon Kinetics. In addition to that, SPDR SSGA is 1.48 times more volatile than Horizon Kinetics Inflation. It trades about 0.1 of its total potential returns per unit of risk. Horizon Kinetics Inflation is currently generating about 0.16 per unit of volatility. If you would invest 3,005 in Horizon Kinetics Inflation on September 3, 2024 and sell it today you would earn a total of 1,261 from holding Horizon Kinetics Inflation or generate 41.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SSGA Small vs. Horizon Kinetics Inflation
Performance |
| Timeline |
| SPDR SSGA Small |
| Horizon Kinetics Inf |
SPDR SSGA and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSGA and Horizon Kinetics
The main advantage of trading using opposite SPDR SSGA and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSGA 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.| SPDR SSGA vs. Horizon Kinetics Inflation | SPDR SSGA vs. Virtus ETF Trust | SPDR SSGA vs. iShares MSCI USA | SPDR SSGA vs. Pacer Cash Cows |
| Horizon Kinetics vs. SPACE | Horizon Kinetics vs. Bayview Acquisition Corp | Horizon Kinetics vs. Ampleforth | Horizon Kinetics vs. ionet |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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