Correlation Between Hennessy Cornerstone and Payden Emerging
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and Payden Emerging 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 Payden Emerging 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 Payden Emerging Markets, you can compare the effects of market volatilities on Hennessy Cornerstone and Payden Emerging 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 Payden Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and Payden Emerging.
Diversification Opportunities for Hennessy Cornerstone and Payden Emerging
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hennessy and Payden is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Growth and Payden Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Emerging Markets 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 Payden Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Emerging Markets has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and Payden Emerging go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and Payden Emerging
Assuming the 90 days horizon Hennessy Nerstone Growth is expected to generate 2.41 times more return on investment than Payden Emerging. However, Hennessy Cornerstone is 2.41 times more volatile than Payden Emerging Markets. It trades about 0.4 of its potential returns per unit of risk. Payden Emerging Markets is currently generating about -0.09 per unit of risk. If you would invest 3,540 in Hennessy Nerstone Growth on September 1, 2024 and sell it today you would earn a total of 389.00 from holding Hennessy Nerstone Growth or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hennessy Nerstone Growth vs. Payden Emerging Markets
Performance |
| Timeline |
| Hennessy Nerstone Growth |
| Payden Emerging Markets |
Hennessy Cornerstone and Payden Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Cornerstone and Payden Emerging
The main advantage of trading using opposite Hennessy Cornerstone and Payden Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, Payden Emerging 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 Payden Emerging will offset losses from the drop in Payden Emerging'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 |
| Payden Emerging vs. Payden Porate Bond | Payden Emerging vs. Payden Absolute Return | Payden Emerging vs. Payden Absolute Return | Payden Emerging vs. Payden Emerging Markets |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |