Correlation Between Horizon Kinetics and Global X

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

Diversification Opportunities for Horizon Kinetics and Global X

-0.67

Correlation Coefficient

Horizon Kinetics  Global X

Excellent diversification

The 3 months correlation between Horizon and Global is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics Medical and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and Global X go up and down completely randomly.

Pair Corralation between Horizon Kinetics and Global X

Given the investment horizon of 90 days Horizon Kinetics Medical is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Horizon Kinetics Medical is 1.34 times less risky than Global X. The etf trades about -0.18 of its potential returns per unit of risk. The Global X Funds is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,637  in Global X Funds on September 3, 2024 and sell it today you would earn a total of  295.00  from holding Global X Funds or generate 8.11% return on investment over 90 days.

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

Horizon Kinetics Medical  vs.  Global X Funds

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 unsteady 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.

Global X Funds

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Horizon Kinetics and Global X

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

The idea behind Horizon Kinetics Medical and Global X Funds 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.