Correlation Between Six Circles and Henderson European
Can any of the company-specific risk be diversified away by investing in both Six Circles and Henderson European 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 Six Circles and Henderson European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Six Circles International and Henderson European Focus, you can compare the effects of market volatilities on Six Circles and Henderson European 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 Six Circles with a short position of Henderson European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Circles and Henderson European.
Diversification Opportunities for Six Circles and Henderson European
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Six and Henderson is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Six Circles International and Henderson European Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson European Focus and Six Circles 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 Six Circles International are associated (or correlated) with Henderson European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson European Focus has no effect on the direction of Six Circles i.e., Six Circles and Henderson European go up and down completely randomly.
Pair Corralation between Six Circles and Henderson European
Assuming the 90 days horizon Six Circles International is expected to generate 0.96 times more return on investment than Henderson European. However, Six Circles International is 1.04 times less risky than Henderson European. It trades about 0.05 of its potential returns per unit of risk. Henderson European Focus is currently generating about 0.04 per unit of risk. If you would invest 933.00 in Six Circles International on September 4, 2024 and sell it today you would earn a total of 192.00 from holding Six Circles International or generate 20.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Six Circles International vs. Henderson European Focus
Performance |
| Timeline |
| Six Circles International |
| Henderson European Focus |
Six Circles and Henderson European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Circles and Henderson European
The main advantage of trading using opposite Six Circles and Henderson European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Circles position performs unexpectedly, Henderson European 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 Henderson European will offset losses from the drop in Henderson European's long position.| Six Circles vs. Six Circles Tax | Six Circles vs. Six Circles Unconstrained | Six Circles vs. Six Circles Managed | Six Circles vs. Six Circles Managed |
| Henderson European vs. Janus Research Fund | Henderson European vs. Janus Research Fund | Henderson European vs. Janus Research Fund | Henderson European vs. Janus Research 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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