[mrchicity]

I think you are misconstruing holding period or predictive horizon with latency sensitivity. Many HFTs are looking at statistical relationships like the ones you mention to compute a fair price for making markets. The only trades where HFTs hold positions sub-second on average are pure arbitrages. Like you mention, there simply isn't enough price movement within that timeframe to generate a profit.

All the inputs to their pricing change rapidly, so their order prices must change quickly as well, but they can end up carrying risk for long periods of time. The Australian regulator looked at HFT activity in their markets, mind you probably less sophisticated than US stocks, and found the average holding period was 42 minutes: http://tabbforum.com/opinions/hft-concerns-are-overstated

[mathgenius]

I'm not sure the average holding period is a useful thing to measure. For eXample, if you are trading a spread it's how quickly you put on the second leg that matters, and who cares how long you hold the pair for. So, 42 minutes has nothing to do with it.