Correlation Between Horizon Kinetics and Xtrackers MSCI

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

By analyzing existing cross correlation between Horizon Kinetics SPAC and Xtrackers MSCI All, you can compare the effects of market volatilities on Horizon Kinetics and Xtrackers MSCI 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Kinetics and Xtrackers MSCI.

Diversification Opportunities for Horizon Kinetics and Xtrackers MSCI

-0.57

Correlation Coefficient

Horizon Kinetics  Xtrackers MSCI

Excellent diversification

The 3 months correlation between Horizon and Xtrackers is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics SPAC and Xtrackers MSCI All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI All 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 SPAC are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI All has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and Xtrackers MSCI go up and down completely randomly.

Pair Corralation between Horizon Kinetics and Xtrackers MSCI

If you would invest  9,703  in Horizon Kinetics SPAC on September 14, 2024 and sell it today you would earn a total of  414.00  from holding Horizon Kinetics SPAC or generate 4.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.4%
Values	Daily Returns

Horizon Kinetics SPAC  vs.  Xtrackers MSCI All

Horizon Kinetics SPAC

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics SPAC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Horizon Kinetics is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Xtrackers MSCI All

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Horizon Kinetics and Xtrackers MSCI

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

The idea behind Horizon Kinetics SPAC and Xtrackers MSCI All 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..