Correlation Between Us Global and Horizon Funds

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

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

Diversification Opportunities for Us Global and Horizon Funds

0.66

Correlation Coefficient

Us Global  Horizon Funds

Poor diversification

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

Pair Corralation between Us Global and Horizon Funds

Assuming the 90 days horizon Us Global Investors is expected to under-perform the Horizon Funds. In addition to that, Us Global is 5.76 times more volatile than Horizon Funds . It trades about 0.0 of its total potential returns per unit of risk. Horizon Funds is currently generating about 0.03 per unit of volatility. If you would invest  4,714  in Horizon Funds on December 20, 2024 and sell it today you would earn a total of  14.00  from holding Horizon Funds or generate 0.3% return on investment over 90 days.

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

Us Global Investors  vs.  Horizon Funds

Us Global Investors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Us Global Investors has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Us Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Horizon Funds

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Funds are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Horizon Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Us Global and Horizon Funds

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

The idea behind Us Global Investors and Horizon Funds 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..