Correlation Between Kinetics Global and Horizon Spin-off

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

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

Diversification Opportunities for Kinetics Global and Horizon Spin-off

0.9

Correlation Coefficient

Kinetics Global  Horizon Spin-off

Almost no diversification

The 3 months correlation between Kinetics and Horizon is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Global Fund and Horizon Spin Off And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Spin Off and Kinetics 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 Kinetics Global Fund are associated (or correlated) with Horizon Spin-off. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Spin Off has no effect on the direction of Kinetics Global i.e., Kinetics Global and Horizon Spin-off go up and down completely randomly.

Pair Corralation between Kinetics Global and Horizon Spin-off

Assuming the 90 days horizon Kinetics Global Fund is expected to generate 0.67 times more return on investment than Horizon Spin-off. However, Kinetics Global Fund is 1.49 times less risky than Horizon Spin-off. It trades about 0.11 of its potential returns per unit of risk. Horizon Spin Off And is currently generating about 0.04 per unit of risk. If you would invest  834.00  in Kinetics Global Fund on October 3, 2024 and sell it today you would earn a total of  767.00  from holding Kinetics Global Fund or generate 91.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

Kinetics Global Fund  vs.  Horizon Spin Off And

Kinetics Global

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Global Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Kinetics Global showed solid returns over the last few months and may actually be approaching a breakup point.

Horizon Spin Off

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Spin Off And are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Horizon Spin-off may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Kinetics Global and Horizon Spin-off

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

The idea behind Kinetics Global Fund and Horizon Spin Off And 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.