Correlation Between Horizon Kinetics and BFIT

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

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

Diversification Opportunities for Horizon Kinetics and BFIT

0.0

Correlation Coefficient

Horizon Kinetics  BFIT

Pay attention - limited upside

The 3 months correlation between Horizon and BFIT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics Inflation and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT and Horizon Kinetics 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 Kinetics Inflation are associated (or correlated) with BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and BFIT go up and down completely randomly.

Pair Corralation between Horizon Kinetics and BFIT

If you would invest (100.00) in BFIT on December 3, 2024 and sell it today you would earn a total of  100.00  from holding BFIT or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Horizon Kinetics Inflation  vs.  BFIT

Horizon Kinetics Inf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Horizon Kinetics Inflation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Horizon Kinetics is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

BFIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days BFIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, BFIT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Horizon Kinetics and BFIT

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

The idea behind Horizon Kinetics Inflation and BFIT 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.