Correlation Between Hennessy Cornerstone and Cullen High
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and Cullen High 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 Cullen High 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 Cullen High Dividend, you can compare the effects of market volatilities on Hennessy Cornerstone and Cullen High 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 Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and Cullen High.
Diversification Opportunities for Hennessy Cornerstone and Cullen High
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hennessy and Cullen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Growth and Cullen High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen High Dividend 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 Cullen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen High Dividend has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and Cullen High go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and Cullen High
Assuming the 90 days horizon Hennessy Nerstone Growth is expected to generate 2.24 times more return on investment than Cullen High. However, Hennessy Cornerstone is 2.24 times more volatile than Cullen High Dividend. It trades about 0.08 of its potential returns per unit of risk. Cullen High Dividend is currently generating about 0.1 per unit of risk. If you would invest 3,460 in Hennessy Nerstone Growth on September 1, 2024 and sell it today you would earn a total of 469.00 from holding Hennessy Nerstone Growth or generate 13.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Hennessy Nerstone Growth vs. Cullen High Dividend
Performance |
| Timeline |
| Hennessy Nerstone Growth |
| Cullen High Dividend |
Hennessy Cornerstone and Cullen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Cornerstone and Cullen High
The main advantage of trading using opposite Hennessy Cornerstone and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, Cullen High 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 Cullen High will offset losses from the drop in Cullen High'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 |
| Cullen High vs. The Value Fund | Cullen High vs. Lazard Global Listed | Cullen High vs. Lazard International Strategic | Cullen High vs. Tcw Relative Value |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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