Correlation Between Horizon Kinetics and FolioBeyond Rising

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

Diversification Opportunities for Horizon Kinetics and FolioBeyond Rising

0.87

Correlation Coefficient

Horizon Kinetics  FolioBeyond Rising

Very poor diversification

The 3 months correlation between Horizon and FolioBeyond is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics Inflation and FolioBeyond Rising Rates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FolioBeyond Rising Rates 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 FolioBeyond Rising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FolioBeyond Rising Rates has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and FolioBeyond Rising go up and down completely randomly.

Pair Corralation between Horizon Kinetics and FolioBeyond Rising

Given the investment horizon of 90 days Horizon Kinetics Inflation is expected to generate 1.39 times more return on investment than FolioBeyond Rising. However, Horizon Kinetics is 1.39 times more volatile than FolioBeyond Rising Rates. It trades about 0.09 of its potential returns per unit of risk. FolioBeyond Rising Rates is currently generating about 0.09 per unit of risk. If you would invest  2,944  in Horizon Kinetics Inflation on September 14, 2024 and sell it today you would earn a total of  1,033  from holding Horizon Kinetics Inflation or generate 35.09% return on investment over 90 days.

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

Horizon Kinetics Inflation  vs.  FolioBeyond Rising Rates

Horizon Kinetics Inf

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics Inflation are ranked lower than 10 (%) 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 January 2025.

FolioBeyond Rising Rates

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FolioBeyond Rising Rates are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, FolioBeyond Rising may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Horizon Kinetics and FolioBeyond Rising

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

The idea behind Horizon Kinetics Inflation and FolioBeyond Rising Rates 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.