Correlation Between Hennessy Technology and Astor Long/short
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Astor Long/short 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 Astor Long/short 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 Astor Longshort Fund, you can compare the effects of market volatilities on Hennessy Technology and Astor Long/short 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 Astor Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Astor Long/short.
Diversification Opportunities for Hennessy Technology and Astor Long/short
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and Astor is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Long/short 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 Astor Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Long/short has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Astor Long/short go up and down completely randomly.
Pair Corralation between Hennessy Technology and Astor Long/short
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 3.1 times more return on investment than Astor Long/short. However, Hennessy Technology is 3.1 times more volatile than Astor Longshort Fund. It trades about 0.08 of its potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.15 per unit of risk. If you would invest 1,879 in Hennessy Technology Fund on August 26, 2024 and sell it today you would earn a total of 498.00 from holding Hennessy Technology Fund or generate 26.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Astor Longshort Fund
Performance |
| Timeline |
| Hennessy Technology |
| Astor Long/short |
Hennessy Technology and Astor Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Astor Long/short
The main advantage of trading using opposite Hennessy Technology and Astor Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Astor Long/short 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 Astor Long/short will offset losses from the drop in Astor Long/short'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 |
| Astor Long/short vs. Hennessy Technology Fund | Astor Long/short vs. Pgim Jennison Technology | Astor Long/short vs. Janus Global Technology | Astor Long/short vs. Fidelity Advisor 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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