Correlation Between Hennessy Cornerstone and Clipper Fund
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and Clipper Fund 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 Hennessy Cornerstone and Clipper Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Nerstone Growth and Clipper Fund Inc, you can compare the effects of market volatilities on Hennessy Cornerstone and Clipper Fund 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 Hennessy Cornerstone with a short position of Clipper Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and Clipper Fund.
Diversification Opportunities for Hennessy Cornerstone and Clipper Fund
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and Clipper is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Growth and Clipper Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Fund and Hennessy Cornerstone 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 Hennessy Nerstone Growth are associated (or correlated) with Clipper Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Fund has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and Clipper Fund go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and Clipper Fund
Assuming the 90 days horizon Hennessy Nerstone Growth is expected to generate 1.41 times more return on investment than Clipper Fund. However, Hennessy Cornerstone is 1.41 times more volatile than Clipper Fund Inc. It trades about 0.09 of its potential returns per unit of risk. Clipper Fund Inc is currently generating about 0.08 per unit of risk. If you would invest 2,375 in Hennessy Nerstone Growth on September 1, 2024 and sell it today you would earn a total of 1,554 from holding Hennessy Nerstone Growth or generate 65.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Hennessy Nerstone Growth vs. Clipper Fund Inc
Performance |
| Timeline |
| Hennessy Nerstone Growth |
| Clipper Fund |
Hennessy Cornerstone and Clipper Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Cornerstone and Clipper Fund
The main advantage of trading using opposite Hennessy Cornerstone and Clipper Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, Clipper Fund 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 Clipper Fund will offset losses from the drop in Clipper Fund's long position.| Hennessy Cornerstone vs. Hennessy Nerstone Value | Hennessy Cornerstone vs. The Jensen Portfolio | Hennessy Cornerstone vs. Meridian Trarian Fund | Hennessy Cornerstone vs. Clipper Fund Inc |
| Clipper Fund vs. Value Fund Value | Clipper Fund vs. Meridian Trarian Fund | Clipper Fund vs. Longleaf Partners Fund | Clipper Fund vs. Mairs Power Growth |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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