Correlation Between Henderson International and Henderson European
Can any of the company-specific risk be diversified away by investing in both Henderson International and Henderson European 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 Henderson International and Henderson European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson International Opportunities and Henderson European Focus, you can compare the effects of market volatilities on Henderson International and Henderson European 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 Henderson International with a short position of Henderson European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson International and Henderson European.
Diversification Opportunities for Henderson International and Henderson European
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Henderson and Henderson is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Henderson International Opport and Henderson European Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson European Focus and Henderson International 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 Henderson International Opportunities are associated (or correlated) with Henderson European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson European Focus has no effect on the direction of Henderson International i.e., Henderson International and Henderson European go up and down completely randomly.
Pair Corralation between Henderson International and Henderson European
If you would invest 1,797 in Henderson International Opportunities on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Henderson International Opportunities or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Henderson International Opport vs. Henderson European Focus
Performance |
| Timeline |
| Henderson International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Henderson European Focus |
Henderson International and Henderson European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson International and Henderson European
The main advantage of trading using opposite Henderson International and Henderson European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson International position performs unexpectedly, Henderson European 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 Henderson European will offset losses from the drop in Henderson European's long position.| Henderson International vs. Henderson European Focus | Henderson International vs. The Hartford Capital | Henderson International vs. Ivy Asset Strategy | Henderson International vs. Loomis Sayles Strategic |
| Henderson European vs. Henderson European Focus | Henderson European vs. Invesco European Small | Henderson European vs. Henderson Global Equity | Henderson European vs. Oppenheimer Developing 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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