Correlation Between The Gabelli and Hennessy Technology
Can any of the company-specific risk be diversified away by investing in both The Gabelli 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 The Gabelli and Hennessy Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Growth and Hennessy Technology Fund, you can compare the effects of market volatilities on The Gabelli 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 The Gabelli with a short position of Hennessy Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gabelli and Hennessy Technology.
Diversification Opportunities for The Gabelli and Hennessy Technology
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Hennessy is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli 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 The Gabelli 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 The Gabelli 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 The Gabelli i.e., The Gabelli and Hennessy Technology go up and down completely randomly.
Pair Corralation between The Gabelli and Hennessy Technology
Assuming the 90 days horizon The Gabelli is expected to generate 1.74 times less return on investment than Hennessy Technology. But when comparing it to its historical volatility, The Gabelli Growth is 1.2 times less risky than Hennessy Technology. It trades about 0.11 of its potential returns per unit of risk. Hennessy Technology Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,269 in Hennessy Technology Fund on August 26, 2024 and sell it today you would earn a total of 108.00 from holding Hennessy Technology Fund or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Growth vs. Hennessy Technology Fund
Performance |
| Timeline |
| Gabelli Growth |
| Hennessy Technology |
The Gabelli and Hennessy Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Gabelli and Hennessy Technology
The main advantage of trading using opposite The Gabelli and Hennessy Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Gabelli 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.| The Gabelli vs. Hennessy Technology Fund | The Gabelli vs. Pgim Jennison Technology | The Gabelli vs. Science Technology Fund | The Gabelli vs. Red Oak Technology |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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