Correlation Between Dreyfus Technology and Hennessy Technology
Can any of the company-specific risk be diversified away by investing in both Dreyfus Technology and Hennessy Technology 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 Dreyfus Technology and Hennessy Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Technology Growth and Hennessy Technology Fund, you can compare the effects of market volatilities on Dreyfus Technology and Hennessy Technology 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 Dreyfus Technology with a short position of Hennessy Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Technology and Hennessy Technology.
Diversification Opportunities for Dreyfus Technology and Hennessy Technology
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dreyfus and Hennessy is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Technology Growth and Hennessy Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Technology and Dreyfus Technology 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 Dreyfus Technology Growth are associated (or correlated) with Hennessy Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Technology has no effect on the direction of Dreyfus Technology i.e., Dreyfus Technology and Hennessy Technology go up and down completely randomly.
Pair Corralation between Dreyfus Technology and Hennessy Technology
Assuming the 90 days horizon Dreyfus Technology Growth is expected to generate 0.93 times more return on investment than Hennessy Technology. However, Dreyfus Technology Growth is 1.08 times less risky than Hennessy Technology. It trades about 0.19 of its potential returns per unit of risk. Hennessy Technology Fund is currently generating about 0.08 per unit of risk. If you would invest 7,643 in Dreyfus Technology Growth on August 24, 2024 and sell it today you would earn a total of 392.00 from holding Dreyfus Technology Growth or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Technology Growth vs. Hennessy Technology Fund
Performance |
| Timeline |
| Dreyfus Technology Growth |
| Hennessy Technology |
Dreyfus Technology and Hennessy Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Technology and Hennessy Technology
The main advantage of trading using opposite Dreyfus Technology and Hennessy Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Technology position performs unexpectedly, Hennessy Technology 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 Technology will offset losses from the drop in Hennessy Technology's long position.| Dreyfus Technology vs. Tiaa Cref Small Cap Blend | Dreyfus Technology vs. Delaware Limited Term Diversified | Dreyfus Technology vs. Qs Growth Fund | Dreyfus Technology vs. Vanguard Explorer Value |
| Hennessy Technology vs. Black Oak Emerging | Hennessy Technology vs. Hennessy Large Cap | Hennessy Technology vs. Hennessy Japan Fund | Hennessy Technology 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |