Correlation Between Horizon Technology and Rivernorth Opportunities

Can any of the company-specific risk be diversified away by investing in both Horizon Technology and Rivernorth Opportunities 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 Rivernorth Opportunities 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 Rivernorth Opportunities, you can compare the effects of market volatilities on Horizon Technology and Rivernorth Opportunities 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 Rivernorth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Technology and Rivernorth Opportunities.

Diversification Opportunities for Horizon Technology and Rivernorth Opportunities

-0.28

Correlation Coefficient

Horizon Technology  Rivernorth Opportunities

Very good diversification

The 3 months correlation between Horizon and Rivernorth is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and Rivernorth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivernorth Opportunities 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 Rivernorth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivernorth Opportunities has no effect on the direction of Horizon Technology i.e., Horizon Technology and Rivernorth Opportunities go up and down completely randomly.

Pair Corralation between Horizon Technology and Rivernorth Opportunities

Given the investment horizon of 90 days Horizon Technology Finance is expected to under-perform the Rivernorth Opportunities. In addition to that, Horizon Technology is 1.74 times more volatile than Rivernorth Opportunities. It trades about -0.22 of its total potential returns per unit of risk. Rivernorth Opportunities is currently generating about 0.08 per unit of volatility. If you would invest  1,208  in Rivernorth Opportunities on August 31, 2024 and sell it today you would earn a total of  35.00  from holding Rivernorth Opportunities or generate 2.9% return on investment over 90 days.

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

Horizon Technology Finance  vs.  Rivernorth Opportunities

Horizon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Horizon Technology Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Rivernorth Opportunities

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rivernorth Opportunities are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable forward indicators, Rivernorth Opportunities is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Horizon Technology and Rivernorth Opportunities

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

The idea behind Horizon Technology Finance and Rivernorth Opportunities 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.