Correlation Between Robo Global and Horizon Kinetics

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

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

Diversification Opportunities for Robo Global and Horizon Kinetics

0.38

Correlation Coefficient

Robo Global  Horizon Kinetics

Weak diversification

The 3 months correlation between Robo and Horizon is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Robo Global Robotics and Horizon Kinetics Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Kinetics Inf and Robo Global 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 Robo Global Robotics are associated (or correlated) with Horizon Kinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Kinetics Inf has no effect on the direction of Robo Global i.e., Robo Global and Horizon Kinetics go up and down completely randomly.

Pair Corralation between Robo Global and Horizon Kinetics

Given the investment horizon of 90 days Robo Global Robotics is expected to under-perform the Horizon Kinetics. In addition to that, Robo Global is 1.13 times more volatile than Horizon Kinetics Inflation. It trades about -0.2 of its total potential returns per unit of risk. Horizon Kinetics Inflation is currently generating about 0.14 per unit of volatility. If you would invest  3,922  in Horizon Kinetics Inflation on December 4, 2024 and sell it today you would earn a total of  114.00  from holding Horizon Kinetics Inflation or generate 2.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Robo Global Robotics  vs.  Horizon Kinetics Inflation

Robo Global Robotics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Robo Global Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Robo Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Robo Global and Horizon Kinetics

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

The idea behind Robo Global Robotics and Horizon Kinetics Inflation 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.