Correlation Between Hennessy Cornerstone and Dreyfus/standish
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and Dreyfus/standish 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 Dreyfus/standish 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 Dreyfusstandish Global Fixed, you can compare the effects of market volatilities on Hennessy Cornerstone and Dreyfus/standish 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 Dreyfus/standish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and Dreyfus/standish.
Diversification Opportunities for Hennessy Cornerstone and Dreyfus/standish
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hennessy and Dreyfus/standish is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Mid and Dreyfusstandish Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusstandish Global 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 Dreyfus/standish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfusstandish Global has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and Dreyfus/standish go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and Dreyfus/standish
Assuming the 90 days horizon Hennessy Nerstone Mid is expected to generate 4.98 times more return on investment than Dreyfus/standish. However, Hennessy Cornerstone is 4.98 times more volatile than Dreyfusstandish Global Fixed. It trades about 0.09 of its potential returns per unit of risk. Dreyfusstandish Global Fixed is currently generating about 0.07 per unit of risk. If you would invest 1,698 in Hennessy Nerstone Mid on September 4, 2024 and sell it today you would earn a total of 1,195 from holding Hennessy Nerstone Mid or generate 70.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hennessy Nerstone Mid vs. Dreyfusstandish Global Fixed
Performance |
| Timeline |
| Hennessy Nerstone Mid |
| Dreyfusstandish Global |
Hennessy Cornerstone and Dreyfus/standish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Cornerstone and Dreyfus/standish
The main advantage of trading using opposite Hennessy Cornerstone and Dreyfus/standish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, Dreyfus/standish 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 Dreyfus/standish will offset losses from the drop in Dreyfus/standish's long position.| Hennessy Cornerstone vs. Hennessy Focus Fund | Hennessy Cornerstone vs. Large Cap E | Hennessy Cornerstone vs. Eventide Gilead Fund | Hennessy Cornerstone vs. Boston Partners All Cap |
| Dreyfus/standish vs. Dreyfusstandish Global Fixed | Dreyfus/standish vs. Dreyfus High Yield | Dreyfus/standish vs. Dreyfus High Yield | Dreyfus/standish vs. Dreyfus High Yield |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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