Correlation Between Horizon Technology and Virtus Dividend

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

By analyzing existing cross correlation between Horizon Technology Finance and Virtus Dividend Interest, you can compare the effects of market volatilities on Horizon Technology and Virtus Dividend 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 Horizon Technology with a short position of Virtus Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Technology and Virtus Dividend.

Diversification Opportunities for Horizon Technology and Virtus Dividend

0.53

Correlation Coefficient

Horizon Technology  Virtus Dividend

Very weak diversification

The 3 months correlation between Horizon and Virtus is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and Virtus Dividend Interest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Dividend Interest and Horizon Technology 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 Horizon Technology Finance are associated (or correlated) with Virtus Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Dividend Interest has no effect on the direction of Horizon Technology i.e., Horizon Technology and Virtus Dividend go up and down completely randomly.

Pair Corralation between Horizon Technology and Virtus Dividend

Given the investment horizon of 90 days Horizon Technology Finance is expected to generate 1.78 times more return on investment than Virtus Dividend. However, Horizon Technology is 1.78 times more volatile than Virtus Dividend Interest. It trades about 0.33 of its potential returns per unit of risk. Virtus Dividend Interest is currently generating about -0.28 per unit of risk. If you would invest  915.00  in Horizon Technology Finance on November 28, 2024 and sell it today you would earn a total of  52.00  from holding Horizon Technology Finance or generate 5.68% return on investment over 90 days.

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

Horizon Technology Finance  vs.  Virtus Dividend Interest

Horizon Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Technology Finance are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Horizon Technology may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Virtus Dividend Interest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Dividend Interest has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady technical and fundamental indicators, Virtus Dividend is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Horizon Technology and Virtus Dividend

The main advantage of trading using opposite Horizon Technology and Virtus Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Technology position performs unexpectedly, Virtus Dividend 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 Virtus Dividend will offset losses from the drop in Virtus Dividend's long position.

The idea behind Horizon Technology Finance and Virtus Dividend Interest 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.