Correlation Between Horizon Kinetics and SPDR SP

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

Diversification Opportunities for Horizon Kinetics and SPDR SP

0.66

Correlation Coefficient

Horizon Kinetics  SPDR SP

Poor diversification

The 3 months correlation between Horizon and SPDR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics SPAC and SPDR SP Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Emerging 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Emerging has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and SPDR SP go up and down completely randomly.

Pair Corralation between Horizon Kinetics and SPDR SP

Given the investment horizon of 90 days Horizon Kinetics is expected to generate 1.19 times less return on investment than SPDR SP. But when comparing it to its historical volatility, Horizon Kinetics SPAC is 2.4 times less risky than SPDR SP. It trades about 0.12 of its potential returns per unit of risk. SPDR SP Emerging is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,504  in SPDR SP Emerging on December 28, 2024 and sell it today you would earn a total of  81.00  from holding SPDR SP Emerging or generate 2.31% return on investment over 90 days.

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

Horizon Kinetics SPAC  vs.  SPDR SP Emerging

Horizon Kinetics SPAC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics SPAC are ranked lower than 9 (%) 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.

SPDR SP Emerging

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP Emerging are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable forward indicators, SPDR SP is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Horizon Kinetics and SPDR SP

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

The idea behind Horizon Kinetics SPAC and SPDR SP Emerging 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.