Correlation Between Hennessy Cornerstone and Akre Focus
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and Akre Focus 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 Akre Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Nerstone Mid and Akre Focus Fund, you can compare the effects of market volatilities on Hennessy Cornerstone and Akre Focus 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 Akre Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and Akre Focus.
Diversification Opportunities for Hennessy Cornerstone and Akre Focus
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hennessy and Akre is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Mid and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund 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 Mid are associated (or correlated) with Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and Akre Focus go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and Akre Focus
Assuming the 90 days horizon Hennessy Nerstone Mid is expected to under-perform the Akre Focus. In addition to that, Hennessy Cornerstone is 1.34 times more volatile than Akre Focus Fund. It trades about -0.3 of its total potential returns per unit of risk. Akre Focus Fund is currently generating about -0.01 per unit of volatility. If you would invest 6,773 in Akre Focus Fund on November 27, 2024 and sell it today you would lose (17.00) from holding Akre Focus Fund or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Nerstone Mid vs. Akre Focus Fund
Performance |
| Timeline |
| Hennessy Nerstone Mid |
| Akre Focus Fund |
Hennessy Cornerstone and Akre Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Cornerstone and Akre Focus
The main advantage of trading using opposite Hennessy Cornerstone and Akre Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, Akre Focus 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 Akre Focus will offset losses from the drop in Akre Focus' long position.| Hennessy Cornerstone vs. Hennessy Focus Fund | Hennessy Cornerstone vs. Small Company Stock Fund | Hennessy Cornerstone vs. Large Cap E | Hennessy Cornerstone vs. Eventide Gilead Fund |
| Akre Focus vs. Osterweis Strategic Income | Akre Focus vs. Doubleline Low Duration | Akre Focus vs. Doubleline Total Return | Akre Focus vs. Primecap Odyssey 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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