Correlation Between Hennessy Nerstone and Clipper Fund
Can any of the company-specific risk be diversified away by investing in both Hennessy Nerstone 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 Nerstone 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 Value and Clipper Fund Inc, you can compare the effects of market volatilities on Hennessy Nerstone 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 Nerstone with a short position of Clipper Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Nerstone and Clipper Fund.
Diversification Opportunities for Hennessy Nerstone and Clipper Fund
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hennessy and Clipper is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Value 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 Nerstone 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 Value 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 Nerstone i.e., Hennessy Nerstone and Clipper Fund go up and down completely randomly.
Pair Corralation between Hennessy Nerstone and Clipper Fund
Assuming the 90 days horizon Hennessy Nerstone Value is expected to generate 0.23 times more return on investment than Clipper Fund. However, Hennessy Nerstone Value is 4.28 times less risky than Clipper Fund. It trades about -0.31 of its potential returns per unit of risk. Clipper Fund Inc is currently generating about -0.18 per unit of risk. If you would invest 2,199 in Hennessy Nerstone Value on September 18, 2024 and sell it today you would lose (62.00) from holding Hennessy Nerstone Value or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Nerstone Value vs. Clipper Fund Inc
Performance |
| Timeline |
| Hennessy Nerstone Value |
| Clipper Fund |
Hennessy Nerstone and Clipper Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Nerstone and Clipper Fund
The main advantage of trading using opposite Hennessy Nerstone and Clipper Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Nerstone 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 Nerstone vs. Hennessy Nerstone Growth | Hennessy Nerstone vs. Hennessy Total Return | Hennessy Nerstone vs. Hennessy Balanced Fund | Hennessy Nerstone vs. Hennessy Nerstone Large |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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