Correlation Between Hennessy Focus and Simt Us
Can any of the company-specific risk be diversified away by investing in both Hennessy Focus and Simt Us 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 Focus and Simt Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Focus Fund and Simt Managed Volatility, you can compare the effects of market volatilities on Hennessy Focus and Simt Us 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 Focus with a short position of Simt Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Focus and Simt Us.
Diversification Opportunities for Hennessy Focus and Simt Us
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hennessy and Simt is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Focus Fund and Simt Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Managed Volatility and Hennessy Focus 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 Focus Fund are associated (or correlated) with Simt Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Managed Volatility has no effect on the direction of Hennessy Focus i.e., Hennessy Focus and Simt Us go up and down completely randomly.
Pair Corralation between Hennessy Focus and Simt Us
Assuming the 90 days horizon Hennessy Focus Fund is expected to generate 2.31 times more return on investment than Simt Us. However, Hennessy Focus is 2.31 times more volatile than Simt Managed Volatility. It trades about 0.12 of its potential returns per unit of risk. Simt Managed Volatility is currently generating about 0.19 per unit of risk. If you would invest 4,611 in Hennessy Focus Fund on August 29, 2024 and sell it today you would earn a total of 985.00 from holding Hennessy Focus Fund or generate 21.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Focus Fund vs. Simt Managed Volatility
Performance |
| Timeline |
| Hennessy Focus |
| Simt Managed Volatility |
Hennessy Focus and Simt Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Focus and Simt Us
The main advantage of trading using opposite Hennessy Focus and Simt Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Focus position performs unexpectedly, Simt Us 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 Simt Us will offset losses from the drop in Simt Us' long position.| Hennessy Focus vs. Hennessy Nerstone Mid | Hennessy Focus vs. Amg Yacktman Focused | Hennessy Focus vs. Parnassus Endeavor Fund | Hennessy Focus vs. Hennessy Small Cap |
| Simt Us vs. Simt Multi Asset Accumulation | Simt Us vs. Saat Market Growth | Simt Us vs. Simt Real Return | Simt Us vs. Simt Small Cap |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |