Correlation Between Boston Partners and Hennessy Cornerstone
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Hennessy Cornerstone 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 Boston Partners and Hennessy Cornerstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Small and Hennessy Nerstone Mid, you can compare the effects of market volatilities on Boston Partners and Hennessy Cornerstone 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 Boston Partners with a short position of Hennessy Cornerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Hennessy Cornerstone.
Diversification Opportunities for Boston Partners and Hennessy Cornerstone
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boston and Hennessy is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Hennessy Nerstone Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Nerstone Mid and Boston Partners 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 Boston Partners Small are associated (or correlated) with Hennessy Cornerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Nerstone Mid has no effect on the direction of Boston Partners i.e., Boston Partners and Hennessy Cornerstone go up and down completely randomly.
Pair Corralation between Boston Partners and Hennessy Cornerstone
Assuming the 90 days horizon Boston Partners Small is expected to generate 1.34 times more return on investment than Hennessy Cornerstone. However, Boston Partners is 1.34 times more volatile than Hennessy Nerstone Mid. It trades about 0.32 of its potential returns per unit of risk. Hennessy Nerstone Mid is currently generating about 0.36 per unit of risk. If you would invest 2,665 in Boston Partners Small on September 1, 2024 and sell it today you would earn a total of 293.00 from holding Boston Partners Small or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Small vs. Hennessy Nerstone Mid
Performance |
| Timeline |
| Boston Partners Small |
| Hennessy Nerstone Mid |
Boston Partners and Hennessy Cornerstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Hennessy Cornerstone
The main advantage of trading using opposite Boston Partners and Hennessy Cornerstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Hennessy Cornerstone 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 Hennessy Cornerstone will offset losses from the drop in Hennessy Cornerstone's long position.| Boston Partners vs. Aggressive Investors 1 | Boston Partners vs. Buffalo Small Cap | Boston Partners vs. Rice Hall James | Boston Partners vs. Putnam Small Cap |
| Hennessy Cornerstone vs. Hennessy Focus Fund | Hennessy Cornerstone vs. Small Company Stock Fund | Hennessy Cornerstone vs. Large Cap E | Hennessy Cornerstone vs. Eventide Gilead Fund |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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