Correlation Between Hennessy Technology and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Angel Oak 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 Angel Oak 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 Angel Oak Ultrashort, you can compare the effects of market volatilities on Hennessy Technology and Angel Oak 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 Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Angel Oak.
Diversification Opportunities for Hennessy Technology and Angel Oak
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hennessy and Angel is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Angel Oak Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Ultrashort 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 Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Ultrashort has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Angel Oak go up and down completely randomly.
Pair Corralation between Hennessy Technology and Angel Oak
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 11.47 times more return on investment than Angel Oak. However, Hennessy Technology is 11.47 times more volatile than Angel Oak Ultrashort. It trades about 0.06 of its potential returns per unit of risk. Angel Oak Ultrashort is currently generating about 0.22 per unit of risk. If you would invest 1,623 in Hennessy Technology Fund on October 14, 2024 and sell it today you would earn a total of 639.00 from holding Hennessy Technology Fund or generate 39.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Angel Oak Ultrashort
Performance |
| Timeline |
| Hennessy Technology |
| Angel Oak Ultrashort |
Hennessy Technology and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Angel Oak
The main advantage of trading using opposite Hennessy Technology and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Hennessy Technology vs. Black Oak Emerging | Hennessy Technology vs. Hennessy Large Cap | Hennessy Technology vs. Hennessy Japan Fund | Hennessy Technology vs. Hennessy Small Cap |
| Angel Oak vs. Icon Information Technology | Angel Oak vs. Hennessy Technology Fund | Angel Oak vs. Towpath Technology | Angel Oak vs. Icon Information Technology |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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