Correlation Between Horizon Kinetics and Matthews Emerging

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

Diversification Opportunities for Horizon Kinetics and Matthews Emerging

-0.35

Correlation Coefficient

Horizon Kinetics  Matthews Emerging

Very good diversification

The 3 months correlation between Horizon and Matthews is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Kinetics SPAC and Matthews Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Emerging Markets 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 Matthews Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Emerging Markets has no effect on the direction of Horizon Kinetics i.e., Horizon Kinetics and Matthews Emerging go up and down completely randomly.

Pair Corralation between Horizon Kinetics and Matthews Emerging

Given the investment horizon of 90 days Horizon Kinetics SPAC is expected to generate 0.96 times more return on investment than Matthews Emerging. However, Horizon Kinetics SPAC is 1.04 times less risky than Matthews Emerging. It trades about 0.03 of its potential returns per unit of risk. Matthews Emerging Markets is currently generating about -0.07 per unit of risk. If you would invest  9,938  in Horizon Kinetics SPAC on August 30, 2024 and sell it today you would earn a total of  126.00  from holding Horizon Kinetics SPAC or generate 1.27% return on investment over 90 days.

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

Horizon Kinetics SPAC  vs.  Matthews Emerging Markets

Horizon Kinetics SPAC

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Horizon Kinetics SPAC has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Matthews Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Matthews Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Matthews Emerging is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Horizon Kinetics and Matthews Emerging

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

The idea behind Horizon Kinetics SPAC and Matthews Emerging Markets 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.