Correlation Between Hennessy Nerstone and Mainstay Wmc
Can any of the company-specific risk be diversified away by investing in both Hennessy Nerstone and Mainstay Wmc 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 Mainstay Wmc 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 Mainstay Wmc Value, you can compare the effects of market volatilities on Hennessy Nerstone and Mainstay Wmc 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 Mainstay Wmc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Nerstone and Mainstay Wmc.
Diversification Opportunities for Hennessy Nerstone and Mainstay Wmc
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hennessy and Mainstay is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Mid and Mainstay Wmc Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Wmc Value 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 Mid are associated (or correlated) with Mainstay Wmc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Wmc Value has no effect on the direction of Hennessy Nerstone i.e., Hennessy Nerstone and Mainstay Wmc go up and down completely randomly.
Pair Corralation between Hennessy Nerstone and Mainstay Wmc
Assuming the 90 days horizon Hennessy Nerstone Mid is expected to generate 2.01 times more return on investment than Mainstay Wmc. However, Hennessy Nerstone is 2.01 times more volatile than Mainstay Wmc Value. It trades about 0.04 of its potential returns per unit of risk. Mainstay Wmc Value is currently generating about 0.04 per unit of risk. If you would invest 2,061 in Hennessy Nerstone Mid on September 12, 2024 and sell it today you would earn a total of 379.00 from holding Hennessy Nerstone Mid or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Nerstone Mid vs. Mainstay Wmc Value
Performance |
| Timeline |
| Hennessy Nerstone Mid |
| Mainstay Wmc Value |
Hennessy Nerstone and Mainstay Wmc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Nerstone and Mainstay Wmc
The main advantage of trading using opposite Hennessy Nerstone and Mainstay Wmc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Nerstone position performs unexpectedly, Mainstay Wmc 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 Mainstay Wmc will offset losses from the drop in Mainstay Wmc's long position.| Hennessy Nerstone vs. Hennessy Focus Fund | Hennessy Nerstone vs. Small Company Stock Fund | Hennessy Nerstone vs. Large Cap E | Hennessy Nerstone vs. Eventide Gilead Fund |
| Mainstay Wmc vs. Ab Select Equity | Mainstay Wmc vs. Touchstone International Equity | Mainstay Wmc vs. Ms Global Fixed | Mainstay Wmc vs. Calamos Global Equity |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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