Correlation Between Horizon Kinetics and IShares Global

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

Diversification Opportunities for Horizon Kinetics and IShares Global

0.43

Correlation Coefficient

Horizon Kinetics  IShares Global

Very weak diversification

The 3 months correlation between Horizon and IShares is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics Medical and iShares Global Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Timber 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Timber has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and IShares Global go up and down completely randomly.

Pair Corralation between Horizon Kinetics and IShares Global

Given the investment horizon of 90 days Horizon Kinetics Medical is expected to generate 0.88 times more return on investment than IShares Global. However, Horizon Kinetics Medical is 1.13 times less risky than IShares Global. It trades about 0.12 of its potential returns per unit of risk. iShares Global Timber is currently generating about 0.05 per unit of risk. If you would invest  2,661  in Horizon Kinetics Medical on December 21, 2024 and sell it today you would earn a total of  170.50  from holding Horizon Kinetics Medical or generate 6.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Horizon Kinetics Medical  vs.  iShares Global Timber

Horizon Kinetics Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics Medical are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, Horizon Kinetics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

iShares Global Timber

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Timber are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, IShares Global is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Horizon Kinetics and IShares Global

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

The idea behind Horizon Kinetics Medical and iShares Global Timber 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.