Correlation Between Hennessy Cornerstone and The Jensen
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and The Jensen 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 The Jensen 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 The Jensen Portfolio, you can compare the effects of market volatilities on Hennessy Cornerstone and The Jensen 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 The Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and The Jensen.
Diversification Opportunities for Hennessy Cornerstone and The Jensen
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hennessy and The is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Value and The Jensen Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Portfolio 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 Value are associated (or correlated) with The Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Portfolio has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and The Jensen go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and The Jensen
Assuming the 90 days horizon Hennessy Nerstone Value is expected to generate 0.27 times more return on investment than The Jensen. However, Hennessy Nerstone Value is 3.76 times less risky than The Jensen. It trades about 0.15 of its potential returns per unit of risk. The Jensen Portfolio is currently generating about -0.14 per unit of risk. If you would invest 2,183 in Hennessy Nerstone Value on August 29, 2024 and sell it today you would earn a total of 46.00 from holding Hennessy Nerstone Value or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Nerstone Value vs. The Jensen Portfolio
Performance |
| Timeline |
| Hennessy Nerstone Value |
| Jensen Portfolio |
Hennessy Cornerstone and The Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Cornerstone and The Jensen
The main advantage of trading using opposite Hennessy Cornerstone and The Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, The Jensen 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 The Jensen will offset losses from the drop in The Jensen's long position.| Hennessy Cornerstone vs. Hennessy Nerstone Growth | Hennessy Cornerstone vs. Hennessy Total Return | Hennessy Cornerstone vs. Hennessy Balanced Fund | Hennessy Cornerstone vs. Hennessy Nerstone Large |
| The Jensen vs. Clipper Fund Inc | The Jensen vs. Parnassus E Equity | The Jensen vs. Mairs Power Growth | The Jensen vs. Sound Shore Fund |
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.
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