Correlation Between Hennessy Cornerstone and Bny Mellon
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and Bny Mellon 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 Bny Mellon 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 Bny Mellon Income, you can compare the effects of market volatilities on Hennessy Cornerstone and Bny Mellon 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 Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and Bny Mellon.
Diversification Opportunities for Hennessy Cornerstone and Bny Mellon
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and Bny is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Mid and Bny Mellon Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Income 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 Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Income has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and Bny Mellon go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and Bny Mellon
Assuming the 90 days horizon Hennessy Nerstone Mid is expected to generate 1.77 times more return on investment than Bny Mellon. However, Hennessy Cornerstone is 1.77 times more volatile than Bny Mellon Income. It trades about 0.09 of its potential returns per unit of risk. Bny Mellon Income is currently generating about 0.08 per unit of risk. If you would invest 1,702 in Hennessy Nerstone Mid on September 3, 2024 and sell it today you would earn a total of 1,197 from holding Hennessy Nerstone Mid or generate 70.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Nerstone Mid vs. Bny Mellon Income
Performance |
| Timeline |
| Hennessy Nerstone Mid |
| Bny Mellon Income |
Hennessy Cornerstone and Bny Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Cornerstone and Bny Mellon
The main advantage of trading using opposite Hennessy Cornerstone and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, Bny Mellon 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 Bny Mellon will offset losses from the drop in Bny Mellon's 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 |
| Bny Mellon vs. Mondrian Emerging Markets | Bny Mellon vs. Jpmorgan Emerging Markets | Bny Mellon vs. Shelton Emerging Markets | Bny Mellon vs. Templeton Emerging Markets |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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