Correlation Between Hennessy Cornerstone and Valic Company
Can any of the company-specific risk be diversified away by investing in both Hennessy Cornerstone and Valic Company 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 Valic Company 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 Valic Company I, you can compare the effects of market volatilities on Hennessy Cornerstone and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and Valic Company.
Diversification Opportunities for Hennessy Cornerstone and Valic Company
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HENNESSY and Valic is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Mid and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and Valic Company go up and down completely randomly.
Pair Corralation between Hennessy Cornerstone and Valic Company
Assuming the 90 days horizon Hennessy Nerstone Mid is expected to generate 0.7 times more return on investment than Valic Company. However, Hennessy Nerstone Mid is 1.42 times less risky than Valic Company. It trades about 0.32 of its potential returns per unit of risk. Valic Company I is currently generating about 0.22 per unit of risk. If you would invest 2,649 in Hennessy Nerstone Mid on August 30, 2024 and sell it today you would earn a total of 230.00 from holding Hennessy Nerstone Mid or generate 8.68% 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. Valic Company I
Performance |
| Timeline |
| Hennessy Nerstone Mid |
| Valic Company I |
Hennessy Cornerstone and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Cornerstone and Valic Company
The main advantage of trading using opposite Hennessy Cornerstone and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Cornerstone position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company'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 |
| Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Us Small Cap | Valic Company vs. Us Targeted Value |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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