Correlation Between Horizon Active and Intermediate-term
Can any of the company-specific risk be diversified away by investing in both Horizon Active and Intermediate-term 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 Intermediate-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Active Asset and Intermediate Term Tax Free Bond, you can compare the effects of market volatilities on Horizon Active and Intermediate-term 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 Intermediate-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Active and Intermediate-term.
Diversification Opportunities for Horizon Active and Intermediate-term
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Horizon and Intermediate-term is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Active Asset and Intermediate Term Tax Free Bon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Term Tax 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 Asset are associated (or correlated) with Intermediate-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Term Tax has no effect on the direction of Horizon Active i.e., Horizon Active and Intermediate-term go up and down completely randomly.
Pair Corralation between Horizon Active and Intermediate-term
Assuming the 90 days horizon Horizon Active Asset is expected to generate 4.74 times more return on investment than Intermediate-term. However, Horizon Active is 4.74 times more volatile than Intermediate Term Tax Free Bond. It trades about 0.21 of its potential returns per unit of risk. Intermediate Term Tax Free Bond is currently generating about 0.17 per unit of risk. If you would invest 1,347 in Horizon Active Asset on May 29, 2025 and sell it today you would earn a total of 114.00 from holding Horizon Active Asset or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Horizon Active Asset vs. Intermediate Term Tax Free Bon
Performance |
| Timeline |
| Horizon Active Asset |
| Intermediate Term Tax |
Horizon Active and Intermediate-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Active and Intermediate-term
The main advantage of trading using opposite Horizon Active and Intermediate-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Active position performs unexpectedly, Intermediate-term 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 Intermediate-term will offset losses from the drop in Intermediate-term's long position.| Horizon Active vs. Fidelity American High | Horizon Active vs. Mesirow Financial High | Horizon Active vs. Pace High Yield | Horizon Active vs. T Rowe Price |
| Intermediate-term vs. Rbc Funds Trust | Intermediate-term vs. T Rowe Price | Intermediate-term vs. T Rowe Price | Intermediate-term vs. Ambrus Core Bond |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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