Correlation Between IShares Small and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both IShares Small 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 IShares Small and Horizon Kinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Small Cap and Horizon Kinetics Inflation, you can compare the effects of market volatilities on IShares Small 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 IShares Small with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Small and Horizon Kinetics.
Diversification Opportunities for IShares Small and Horizon Kinetics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Horizon is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding iShares Small Cap 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 IShares Small 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 iShares Small Cap 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 IShares Small i.e., IShares Small and Horizon Kinetics go up and down completely randomly.
Pair Corralation between IShares Small and Horizon Kinetics
Given the investment horizon of 90 days iShares Small Cap is expected to generate 2.01 times more return on investment than Horizon Kinetics. However, IShares Small is 2.01 times more volatile than Horizon Kinetics Inflation. It trades about 0.24 of its potential returns per unit of risk. Horizon Kinetics Inflation is currently generating about 0.24 per unit of risk. If you would invest 3,248 in iShares Small Cap on August 28, 2024 and sell it today you would earn a total of 377.00 from holding iShares Small Cap or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Small Cap vs. Horizon Kinetics Inflation
Performance |
| Timeline |
| iShares Small Cap |
| Horizon Kinetics Inf |
IShares Small and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Small and Horizon Kinetics
The main advantage of trading using opposite IShares Small and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Small 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.| IShares Small vs. Horizon Kinetics Inflation | IShares Small vs. Virtus ETF Trust | IShares Small vs. Invesco SP SmallCap | IShares Small vs. iShares MSCI USA |
| Horizon Kinetics vs. Main Sector Rotation | Horizon Kinetics vs. Franklin Exponential Data | Horizon Kinetics vs. Goldman Sachs Innovate |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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