Correlation Between Vanguard Health and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both Vanguard Health 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 Vanguard Health and Horizon Kinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Health Care and Horizon Kinetics Medical, you can compare the effects of market volatilities on Vanguard Health 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 Vanguard Health with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Horizon Kinetics.
Diversification Opportunities for Vanguard Health and Horizon Kinetics
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Horizon is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care 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 Vanguard Health 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 Vanguard Health Care 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 Vanguard Health i.e., Vanguard Health and Horizon Kinetics go up and down completely randomly.
Pair Corralation between Vanguard Health and Horizon Kinetics
Considering the 90-day investment horizon Vanguard Health Care is expected to generate 0.8 times more return on investment than Horizon Kinetics. However, Vanguard Health Care is 1.24 times less risky than Horizon Kinetics. It trades about 0.03 of its potential returns per unit of risk. Horizon Kinetics Medical is currently generating about -0.01 per unit of risk. If you would invest 25,864 in Vanguard Health Care on August 25, 2024 and sell it today you would earn a total of 719.00 from holding Vanguard Health Care or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Health Care vs. Horizon Kinetics Medical
Performance |
| Timeline |
| Vanguard Health Care |
| Horizon Kinetics Medical |
Vanguard Health and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Horizon Kinetics
The main advantage of trading using opposite Vanguard Health and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health 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.| Vanguard Health vs. Vanguard Consumer Staples | Vanguard Health vs. Vanguard Financials Index | Vanguard Health vs. Vanguard Information Technology | Vanguard Health vs. Vanguard Consumer Discretionary |
| Horizon Kinetics vs. Global X Clean | Horizon Kinetics vs. Global X Renewable | Horizon Kinetics vs. Global X Thematic | Horizon Kinetics vs. Global X AgTech |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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