Correlation Between Horizon Technology and Gatos Silver

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

Diversification Opportunities for Horizon Technology and Gatos Silver

-0.59

Correlation Coefficient

Horizon Technology  Gatos Silver

Excellent diversification

The 3 months correlation between Horizon and Gatos is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver 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 Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of Horizon Technology i.e., Horizon Technology and Gatos Silver go up and down completely randomly.

Pair Corralation between Horizon Technology and Gatos Silver

Given the investment horizon of 90 days Horizon Technology is expected to generate 10.6 times less return on investment than Gatos Silver. But when comparing it to its historical volatility, Horizon Technology Finance is 5.42 times less risky than Gatos Silver. It trades about 0.04 of its potential returns per unit of risk. Gatos Silver is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  516.00  in Gatos Silver on October 25, 2024 and sell it today you would earn a total of  924.00  from holding Gatos Silver or generate 179.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

Horizon Technology Finance  vs.  Gatos Silver

Horizon Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Technology Finance are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Horizon Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gatos Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gatos Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Horizon Technology and Gatos Silver

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

The idea behind Horizon Technology Finance and Gatos Silver 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.