Correlation Between Pacer Cash and Horizon Kinetics

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

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

Diversification Opportunities for Pacer Cash and Horizon Kinetics

0.46

Correlation Coefficient

Pacer Cash  Horizon Kinetics

Very weak diversification

The 3 months correlation between Pacer and Horizon is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Cash Cows 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 Pacer Cash 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 Pacer Cash Cows 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 Pacer Cash i.e., Pacer Cash and Horizon Kinetics go up and down completely randomly.

Pair Corralation between Pacer Cash and Horizon Kinetics

Given the investment horizon of 90 days Pacer Cash is expected to generate 8.25 times less return on investment than Horizon Kinetics. But when comparing it to its historical volatility, Pacer Cash Cows is 1.45 times less risky than Horizon Kinetics. It trades about 0.02 of its potential returns per unit of risk. Horizon Kinetics Inflation is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,830  in Horizon Kinetics Inflation on December 26, 2024 and sell it today you would earn a total of  320.00  from holding Horizon Kinetics Inflation or generate 8.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Pacer Cash Cows  vs.  Horizon Kinetics Inflation

Pacer Cash Cows

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Cash Cows are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Pacer Cash is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Horizon Kinetics Inf

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics Inflation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Horizon Kinetics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Pacer Cash and Horizon Kinetics

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

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.