Correlation Between Horizon Kinetics and IShares Oil

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

By analyzing existing cross correlation between Horizon Kinetics Medical and iShares Oil Equipment, you can compare the effects of market volatilities on Horizon Kinetics and IShares Oil 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 IShares Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Kinetics and IShares Oil.

Diversification Opportunities for Horizon Kinetics and IShares Oil

-0.19

Correlation Coefficient

Horizon Kinetics  IShares Oil

Good diversification

The 3 months correlation between Horizon and IShares is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics Medical and iShares Oil Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Oil Equipment 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 Medical are associated (or correlated) with IShares Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Oil Equipment has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and IShares Oil go up and down completely randomly.

Pair Corralation between Horizon Kinetics and IShares Oil

Given the investment horizon of 90 days Horizon Kinetics Medical is expected to under-perform the IShares Oil. But the etf apears to be less risky and, when comparing its historical volatility, Horizon Kinetics Medical is 1.3 times less risky than IShares Oil. The etf trades about -0.07 of its potential returns per unit of risk. The iShares Oil Equipment is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest  1,935  in iShares Oil Equipment on October 25, 2024 and sell it today you would earn a total of  219.00  from holding iShares Oil Equipment or generate 11.32% return on investment over 90 days.

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

Horizon Kinetics Medical  vs.  iShares Oil Equipment

Horizon Kinetics Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Horizon Kinetics Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Etf's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

iShares Oil Equipment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Oil Equipment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, IShares Oil may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Horizon Kinetics and IShares Oil

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

The idea behind Horizon Kinetics Medical and iShares Oil Equipment 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 CEOs Directory module to screen CEOs from public companies around the world.