Correlation Between Emerald Banking and Hennessy Small
Can any of the company-specific risk be diversified away by investing in both Emerald Banking and Hennessy Small 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 Emerald Banking and Hennessy Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerald Banking And and Hennessy Small Cap, you can compare the effects of market volatilities on Emerald Banking and Hennessy Small 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 Emerald Banking with a short position of Hennessy Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Banking and Hennessy Small.
Diversification Opportunities for Emerald Banking and Hennessy Small
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Emerald and Hennessy is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Banking And and Hennessy Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Small Cap and Emerald Banking 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 Emerald Banking And are associated (or correlated) with Hennessy Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Small Cap has no effect on the direction of Emerald Banking i.e., Emerald Banking and Hennessy Small go up and down completely randomly.
Pair Corralation between Emerald Banking and Hennessy Small
Assuming the 90 days horizon Emerald Banking is expected to generate 1.03 times less return on investment than Hennessy Small. But when comparing it to its historical volatility, Emerald Banking And is 1.14 times less risky than Hennessy Small. It trades about 0.16 of its potential returns per unit of risk. Hennessy Small Cap is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,247 in Hennessy Small Cap on September 1, 2024 and sell it today you would earn a total of 909.00 from holding Hennessy Small Cap or generate 40.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerald Banking And vs. Hennessy Small Cap
Performance |
| Timeline |
| Emerald Banking And |
| Hennessy Small Cap |
Emerald Banking and Hennessy Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerald Banking and Hennessy Small
The main advantage of trading using opposite Emerald Banking and Hennessy Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Banking position performs unexpectedly, Hennessy Small 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 Small will offset losses from the drop in Hennessy Small's long position.| Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Hennessy Small Cap |
| Hennessy Small vs. Hennessy Large Cap | Hennessy Small vs. Rmb Mendon Financial | Hennessy Small vs. Hennessy Focus Fund | Hennessy Small vs. Rmb Mendon Financial |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Directory Find actively traded commodities issued by global exchanges |