Correlation Between Hennessy Cornerstone and CBOE Volatility
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and CBOE Volatility 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 CBOE Volatility 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 CBOE Volatility Index, you can compare the effects of market volatilities on Hennessy Cornerstone and CBOE Volatility 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 CBOE Volatility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and CBOE Volatility.
Diversification Opportunities for Hennessy Cornerstone and CBOE Volatility
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hennessy and CBOE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Growth and CBOE Volatility Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBOE Volatility Index 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 CBOE Volatility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBOE Volatility Index has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and CBOE Volatility go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and CBOE Volatility
Assuming the 90 days horizon Hennessy Nerstone Growth is expected to generate 0.2 times more return on investment than CBOE Volatility. However, Hennessy Nerstone Growth is 4.93 times less risky than CBOE Volatility. It trades about 0.09 of its potential returns per unit of risk. CBOE Volatility Index is currently generating about 0.02 per unit of risk. If you would invest 2,245 in Hennessy Nerstone Growth on August 30, 2024 and sell it today you would earn a total of 1,644 from holding Hennessy Nerstone Growth or generate 73.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.49% |
| Values | Daily Returns |
Hennessy Nerstone Growth vs. CBOE Volatility Index
Performance |
| Timeline |
Hennessy Cornerstone and CBOE Volatility Volatility Contrast
Predicted Return Density |
| Returns |
Hennessy Nerstone Growth
Pair trading matchups for Hennessy Cornerstone
CBOE Volatility Index
Pair trading matchups for CBOE Volatility
Pair Trading with Hennessy Cornerstone and CBOE Volatility
The main advantage of trading using opposite Hennessy Cornerstone and CBOE Volatility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, CBOE Volatility 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 CBOE Volatility will offset losses from the drop in CBOE Volatility'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 |
| CBOE Volatility vs. Kandi Technologies Group | CBOE Volatility vs. Socket Mobile | CBOE Volatility vs. United Rentals | CBOE Volatility vs. Sphere Entertainment Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |