Correlation Between IShares MSCI and Horizon Kinetics
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 MSCI 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 MSCI USA and Horizon Kinetics Inflation, you can compare the effects of market volatilities on IShares MSCI 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 MSCI with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Horizon Kinetics.
Diversification Opportunities for IShares MSCI and Horizon Kinetics
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Horizon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA 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 MSCI 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 MSCI USA 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 MSCI i.e., IShares MSCI and Horizon Kinetics go up and down completely randomly.
Pair Corralation between IShares MSCI and Horizon Kinetics
Given the investment horizon of 90 days iShares MSCI USA is expected to under-perform the Horizon Kinetics. But the etf apears to be less risky and, when comparing its historical volatility, iShares MSCI USA is 1.77 times less risky than Horizon Kinetics. The etf trades about -0.13 of its potential returns per unit of risk. The Horizon Kinetics Inflation is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 4,086 in Horizon Kinetics Inflation on September 13, 2024 and sell it today you would lose (54.00) from holding Horizon Kinetics Inflation or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI USA vs. Horizon Kinetics Inflation
Performance |
| Timeline |
| iShares MSCI USA |
| Horizon Kinetics Inf |
IShares MSCI and Horizon Kinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Horizon Kinetics
The main advantage of trading using opposite IShares MSCI and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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 MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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