Correlation Between Invesco Global and Horizon Kinetics

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

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

Diversification Opportunities for Invesco Global and Horizon Kinetics

0.88

Correlation Coefficient

Invesco Global  Horizon Kinetics

Very poor diversification

The 3 months correlation between Invesco and Horizon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Listed and Horizon Kinetics Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Kinetics Inf and Invesco 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 Invesco Global Listed are associated (or correlated) with Horizon Kinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Kinetics Inf has no effect on the direction of Invesco Global i.e., Invesco Global and Horizon Kinetics go up and down completely randomly.

Pair Corralation between Invesco Global and Horizon Kinetics

Considering the 90-day investment horizon Invesco Global is expected to generate 1.54 times less return on investment than Horizon Kinetics. In addition to that, Invesco Global is 1.24 times more volatile than Horizon Kinetics Inflation. It trades about 0.13 of its total potential returns per unit of risk. Horizon Kinetics Inflation is currently generating about 0.25 per unit of volatility. If you would invest  3,680  in Horizon Kinetics Inflation on August 30, 2024 and sell it today you would earn a total of  585.00  from holding Horizon Kinetics Inflation or generate 15.9% return on investment over 90 days.

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

Invesco Global Listed  vs.  Horizon Kinetics Inflation

Invesco Global Listed

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Global Listed are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Invesco Global may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Horizon Kinetics Inf

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Kinetics Inflation are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Horizon Kinetics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco Global and Horizon Kinetics

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

The idea behind Invesco Global Listed and Horizon Kinetics Inflation 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.