Correlation Between General Money and Hennessy Cornerstone
Can any of the company-specific risk be diversified away by investing in both General Money 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 General Money and Hennessy Cornerstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Hennessy Nerstone Mid, you can compare the effects of market volatilities on General Money 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 General Money with a short position of Hennessy Cornerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Hennessy Cornerstone.
Diversification Opportunities for General Money and Hennessy Cornerstone
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between General and Hennessy is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Hennessy Nerstone Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Nerstone Mid and General Money 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 General Money Market 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 Mid has no effect on the direction of General Money i.e., General Money and Hennessy Cornerstone go up and down completely randomly.
Pair Corralation between General Money and Hennessy Cornerstone
If you would invest 2,661 in Hennessy Nerstone Mid on August 31, 2024 and sell it today you would earn a total of 238.00 from holding Hennessy Nerstone Mid or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Money Market vs. Hennessy Nerstone Mid
Performance |
| Timeline |
| General Money Market |
| Hennessy Nerstone Mid |
General Money and Hennessy Cornerstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Hennessy Cornerstone
The main advantage of trading using opposite General Money and Hennessy Cornerstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money 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.| General Money vs. T Rowe Price | General Money vs. Old Westbury Large | General Money vs. Qs Large Cap | General Money vs. Morningstar Unconstrained Allocation |
| Hennessy Cornerstone vs. Hennessy Focus Fund | Hennessy Cornerstone vs. Small Company Stock Fund | Hennessy Cornerstone vs. Large Cap E | Hennessy Cornerstone vs. Eventide Gilead 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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