Correlation Between Hennessy Cornerstone and Sit International
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and Sit International 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 Sit International 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 Sit International Equity, you can compare the effects of market volatilities on Hennessy Cornerstone and Sit International 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 Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and Sit International.
Diversification Opportunities for Hennessy Cornerstone and Sit International
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hennessy and Sit is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Mid and Sit International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Equity 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 Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Equity has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and Sit International go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and Sit International
Assuming the 90 days horizon Hennessy Nerstone Mid is expected to generate 1.88 times more return on investment than Sit International. However, Hennessy Cornerstone is 1.88 times more volatile than Sit International Equity. It trades about 0.11 of its potential returns per unit of risk. Sit International Equity is currently generating about 0.09 per unit of risk. If you would invest 1,957 in Hennessy Nerstone Mid on September 1, 2024 and sell it today you would earn a total of 942.00 from holding Hennessy Nerstone Mid or generate 48.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Nerstone Mid vs. Sit International Equity
Performance |
| Timeline |
| Hennessy Nerstone Mid |
| Sit International Equity |
Hennessy Cornerstone and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Cornerstone and Sit International
The main advantage of trading using opposite Hennessy Cornerstone and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, Sit International 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 Sit International will offset losses from the drop in Sit International'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 |
| Sit International vs. Simt Multi Asset Accumulation | Sit International vs. Saat Market Growth | Sit International vs. Simt Real Return | Sit International vs. Simt Small Cap |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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