Correlation Between Hennessy Japan and The Jensen
Can any of the company-specific risk be diversified away by investing in both Hennessy Japan and The Jensen 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 Japan and The Jensen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Japan Fund and The Jensen Portfolio, you can compare the effects of market volatilities on Hennessy Japan and The Jensen 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 Japan with a short position of The Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Japan and The Jensen.
Diversification Opportunities for Hennessy Japan and The Jensen
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hennessy and The is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Japan Fund and The Jensen Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Portfolio and Hennessy Japan 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 Japan Fund are associated (or correlated) with The Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Portfolio has no effect on the direction of Hennessy Japan i.e., Hennessy Japan and The Jensen go up and down completely randomly.
Pair Corralation between Hennessy Japan and The Jensen
Assuming the 90 days horizon Hennessy Japan Fund is expected to generate 0.42 times more return on investment than The Jensen. However, Hennessy Japan Fund is 2.39 times less risky than The Jensen. It trades about 0.03 of its potential returns per unit of risk. The Jensen Portfolio is currently generating about -0.17 per unit of risk. If you would invest 4,357 in Hennessy Japan Fund on August 25, 2024 and sell it today you would earn a total of 27.00 from holding Hennessy Japan Fund or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Japan Fund vs. The Jensen Portfolio
Performance |
| Timeline |
| Hennessy Japan |
| Jensen Portfolio |
Hennessy Japan and The Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Japan and The Jensen
The main advantage of trading using opposite Hennessy Japan and The Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Japan position performs unexpectedly, The Jensen 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 The Jensen will offset losses from the drop in The Jensen's long position.| Hennessy Japan vs. Hennessy Japan Small | Hennessy Japan vs. Hennessy Japan Fund | Hennessy Japan vs. Matthews Japan Fund | Hennessy Japan vs. Matthews Japan Fund |
| The Jensen vs. The Jensen Portfolio | The Jensen vs. T Rowe Price | The Jensen vs. Champlain Mid Cap | The Jensen vs. Massachusetts Investors Growth |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |