Correlation Between EA Series and Horizon Kinetics

Can any of the company-specific risk be diversified away by investing in both EA Series 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 EA Series and Horizon Kinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EA Series Trust and Horizon Kinetics Inflation, you can compare the effects of market volatilities on EA Series 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 EA Series with a short position of Horizon Kinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Horizon Kinetics.

Diversification Opportunities for EA Series and Horizon Kinetics

0.41

Correlation Coefficient

EA Series  Horizon Kinetics

Very weak diversification

The 3 months correlation between CCMG and Horizon is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust 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 EA Series 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 EA Series Trust 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 EA Series i.e., EA Series and Horizon Kinetics go up and down completely randomly.

Pair Corralation between EA Series and Horizon Kinetics

Given the investment horizon of 90 days EA Series Trust is expected to generate 0.76 times more return on investment than Horizon Kinetics. However, EA Series Trust is 1.31 times less risky than Horizon Kinetics. It trades about 0.1 of its potential returns per unit of risk. Horizon Kinetics Inflation is currently generating about 0.07 per unit of risk. If you would invest  2,485  in EA Series Trust on September 4, 2024 and sell it today you would earn a total of  415.00  from holding EA Series Trust or generate 16.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	44.74%
Values	Daily Returns

EA Series Trust  vs.  Horizon Kinetics Inflation

EA Series Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, EA Series is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Horizon Kinetics Inf

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics Inflation are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Horizon Kinetics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EA Series and Horizon Kinetics

The main advantage of trading using opposite EA Series and Horizon Kinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series 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.

The idea behind EA Series Trust and Horizon Kinetics Inflation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.