Correlation Between Hennessy Small and Fisher Investments
Can any of the company-specific risk be diversified away by investing in both Hennessy Small and Fisher Investments 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 Small and Fisher Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Small Cap and Fisher Large Cap, you can compare the effects of market volatilities on Hennessy Small and Fisher Investments 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 Small with a short position of Fisher Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Small and Fisher Investments.
Diversification Opportunities for Hennessy Small and Fisher Investments
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hennessy and Fisher is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Small Cap and Fisher Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Investments and Hennessy Small 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 Small Cap are associated (or correlated) with Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Investments has no effect on the direction of Hennessy Small i.e., Hennessy Small and Fisher Investments go up and down completely randomly.
Pair Corralation between Hennessy Small and Fisher Investments
Assuming the 90 days horizon Hennessy Small Cap is expected to generate 1.29 times more return on investment than Fisher Investments. However, Hennessy Small is 1.29 times more volatile than Fisher Large Cap. It trades about 0.19 of its potential returns per unit of risk. Fisher Large Cap is currently generating about 0.12 per unit of risk. If you would invest 1,490 in Hennessy Small Cap on November 3, 2024 and sell it today you would earn a total of 79.00 from holding Hennessy Small Cap or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Small Cap vs. Fisher Large Cap
Performance |
| Timeline |
| Hennessy Small Cap |
| Fisher Investments |
Hennessy Small and Fisher Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Small and Fisher Investments
The main advantage of trading using opposite Hennessy Small and Fisher Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Small position performs unexpectedly, Fisher Investments 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 Fisher Investments will offset losses from the drop in Fisher Investments' long position.| Hennessy Small vs. Fidelity Sai Inflationfocused | Hennessy Small vs. Ab Bond Inflation | Hennessy Small vs. Atac Inflation Rotation | Hennessy Small vs. Ab Bond Inflation |
| Fisher Investments vs. T Rowe Price | Fisher Investments vs. Us Vector Equity | Fisher Investments vs. The Growth Equity | Fisher Investments vs. Artisan Select 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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