Correlation Between Barings Active and Hennessy Cornerstone
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Hennessy Cornerstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Hennessy Nerstone Growth, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Hennessy Cornerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Hennessy Cornerstone.
Diversification Opportunities for Barings Active and Hennessy Cornerstone
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barings and Hennessy is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Hennessy Nerstone Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Nerstone Growth and Barings 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 Barings Active Short 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 Growth has no effect on the direction of Barings Active i.e., Barings Active and Hennessy Cornerstone go up and down completely randomly.
Pair Corralation between Barings Active and Hennessy Cornerstone
Assuming the 90 days horizon Barings Active is expected to generate 21.58 times less return on investment than Hennessy Cornerstone. But when comparing it to its historical volatility, Barings Active Short is 9.39 times less risky than Hennessy Cornerstone. It trades about 0.14 of its potential returns per unit of risk. Hennessy Nerstone Growth is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,739 in Hennessy Nerstone Growth on August 29, 2024 and sell it today you would earn a total of 362.00 from holding Hennessy Nerstone Growth or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Hennessy Nerstone Growth
Performance |
| Timeline |
| Barings Active Short |
| Hennessy Nerstone Growth |
Barings Active and Hennessy Cornerstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Hennessy Cornerstone
The main advantage of trading using opposite Barings Active and Hennessy Cornerstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. Permanent Portfolio Class | Barings Active vs. HUMANA INC | Barings Active vs. Aquagold International | Barings Active vs. Barloworld Ltd ADR |
| Hennessy Cornerstone vs. Hennessy Nerstone Value | Hennessy Cornerstone vs. Hennessy Nerstone Mid | Hennessy Cornerstone vs. Hennessy Nerstone Large | Hennessy Cornerstone vs. Hennessy Small Cap |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |