Correlation Between Moderately Aggressive and Horizon Spin-off

Can any of the company-specific risk be diversified away by investing in both Moderately Aggressive 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 Moderately Aggressive 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 Moderately Aggressive Balanced and Horizon Spin Off And, you can compare the effects of market volatilities on Moderately Aggressive 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 Moderately Aggressive with a short position of Horizon Spin-off. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderately Aggressive and Horizon Spin-off.

Diversification Opportunities for Moderately Aggressive and Horizon Spin-off

-0.82

Correlation Coefficient

Moderately Aggressive  Horizon Spin-off

Pay attention - limited upside

The 3 months correlation between Moderately and Horizon is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Moderately Aggressive Balanced 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 Moderately Aggressive 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 Moderately Aggressive Balanced 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 Moderately Aggressive i.e., Moderately Aggressive and Horizon Spin-off go up and down completely randomly.

Pair Corralation between Moderately Aggressive and Horizon Spin-off

Assuming the 90 days horizon Moderately Aggressive Balanced is expected to generate 0.27 times more return on investment than Horizon Spin-off. However, Moderately Aggressive Balanced is 3.75 times less risky than Horizon Spin-off. It trades about 0.26 of its potential returns per unit of risk. Horizon Spin Off And is currently generating about -0.22 per unit of risk. If you would invest  1,168  in Moderately Aggressive Balanced on May 3, 2025 and sell it today you would earn a total of  94.00  from holding Moderately Aggressive Balanced or generate 8.05% return on investment over 90 days.

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

Moderately Aggressive Balanced  vs.  Horizon Spin Off And

Moderately Aggressive

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moderately Aggressive Balanced are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Moderately Aggressive may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Horizon Spin Off

Risk-Adjusted Performance

Very Weak

Over the last 90 days Horizon Spin Off And has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Moderately Aggressive and Horizon Spin-off

The main advantage of trading using opposite Moderately Aggressive and Horizon Spin-off positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderately Aggressive 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 Moderately Aggressive Balanced 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.