Correlation Between Horizon Kinetics and Tidal Trust

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

Diversification Opportunities for Horizon Kinetics and Tidal Trust

0.67

Correlation Coefficient

Horizon Kinetics  Tidal Trust

Poor diversification

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

Pair Corralation between Horizon Kinetics and Tidal Trust

Given the investment horizon of 90 days Horizon Kinetics is expected to generate 3.05 times less return on investment than Tidal Trust. But when comparing it to its historical volatility, Horizon Kinetics SPAC is 2.19 times less risky than Tidal Trust. It trades about 0.04 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,373  in Tidal Trust II on September 20, 2024 and sell it today you would earn a total of  290.00  from holding Tidal Trust II or generate 21.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	69.96%
Values	Daily Returns

Horizon Kinetics SPAC  vs.  Tidal Trust II

Horizon Kinetics SPAC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics SPAC are ranked lower than 3 (%) 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.

Tidal Trust II

Risk-Adjusted Performance

12 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust II are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Tidal Trust may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Horizon Kinetics and Tidal Trust

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

The idea behind Horizon Kinetics SPAC and Tidal Trust II 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.