Correlation Between Horizon Active and Auer Growth

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

By analyzing existing cross correlation between Horizon Active Risk and Auer Growth Fund, you can compare the effects of market volatilities on Horizon Active and Auer Growth 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 Active with a short position of Auer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Active and Auer Growth.

Diversification Opportunities for Horizon Active and Auer Growth

0.95

Correlation Coefficient

Horizon Active  Auer Growth

Almost no diversification

The 3 months correlation between Horizon and Auer is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Active Risk and Auer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auer Growth Fund and Horizon Active 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 Active Risk are associated (or correlated) with Auer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auer Growth Fund has no effect on the direction of Horizon Active i.e., Horizon Active and Auer Growth go up and down completely randomly.

Pair Corralation between Horizon Active and Auer Growth

Assuming the 90 days horizon Horizon Active is expected to generate 1.44 times less return on investment than Auer Growth. But when comparing it to its historical volatility, Horizon Active Risk is 1.32 times less risky than Auer Growth. It trades about 0.19 of its potential returns per unit of risk. Auer Growth Fund is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,277  in Auer Growth Fund on May 7, 2025 and sell it today you would earn a total of  144.00  from holding Auer Growth Fund or generate 11.28% return on investment over 90 days.

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

Horizon Active Risk  vs.  Auer Growth Fund

Horizon Active Risk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Active Risk are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Horizon Active may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Auer Growth Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Auer Growth Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Auer Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Horizon Active and Auer Growth

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

The idea behind Horizon Active Risk and Auer Growth Fund 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.