Correlation Between Hennessy Technology and Veea
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Veea 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 Technology and Veea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Technology Fund and Veea Inc, you can compare the effects of market volatilities on Hennessy Technology and Veea 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 Technology with a short position of Veea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Veea.
Diversification Opportunities for Hennessy Technology and Veea
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hennessy and Veea is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and Hennessy Technology 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 Technology Fund are associated (or correlated) with Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Veea go up and down completely randomly.
Pair Corralation between Hennessy Technology and Veea
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 0.07 times more return on investment than Veea. However, Hennessy Technology Fund is 14.74 times less risky than Veea. It trades about 0.1 of its potential returns per unit of risk. Veea Inc is currently generating about -0.02 per unit of risk. If you would invest 2,263 in Hennessy Technology Fund on September 12, 2024 and sell it today you would earn a total of 192.00 from holding Hennessy Technology Fund or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Veea Inc
Performance |
| Timeline |
| Hennessy Technology |
| Veea Inc |
Hennessy Technology and Veea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Veea
The main advantage of trading using opposite Hennessy Technology and Veea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Veea 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 Veea will offset losses from the drop in Veea's long position.| Hennessy Technology vs. Intal High Relative | Hennessy Technology vs. Siit High Yield | Hennessy Technology vs. Ppm High Yield | Hennessy Technology vs. California High Yield Municipal |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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