Correlation Between Hennessy Technology and Blackrock Multi-asset
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Blackrock Multi-asset 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 Blackrock Multi-asset 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 Blackrock Multi Asset Income, you can compare the effects of market volatilities on Hennessy Technology and Blackrock Multi-asset 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 Blackrock Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Blackrock Multi-asset.
Diversification Opportunities for Hennessy Technology and Blackrock Multi-asset
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hennessy and Blackrock is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Blackrock Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Multi Asset 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 Blackrock Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Multi Asset has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Blackrock Multi-asset go up and down completely randomly.
Pair Corralation between Hennessy Technology and Blackrock Multi-asset
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 2.8 times more return on investment than Blackrock Multi-asset. However, Hennessy Technology is 2.8 times more volatile than Blackrock Multi Asset Income. It trades about 0.17 of its potential returns per unit of risk. Blackrock Multi Asset Income is currently generating about 0.18 per unit of risk. If you would invest 2,327 in Hennessy Technology Fund on October 25, 2024 and sell it today you would earn a total of 75.00 from holding Hennessy Technology Fund or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Blackrock Multi Asset Income
Performance |
| Timeline |
| Hennessy Technology |
| Blackrock Multi Asset |
Hennessy Technology and Blackrock Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Blackrock Multi-asset
The main advantage of trading using opposite Hennessy Technology and Blackrock Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Blackrock Multi-asset 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 Blackrock Multi-asset will offset losses from the drop in Blackrock Multi-asset'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 |
| Blackrock Multi-asset vs. Cmg Ultra Short | Blackrock Multi-asset vs. Oakhurst Short Duration | Blackrock Multi-asset vs. Short Term Investment Trust | Blackrock Multi-asset vs. Siit Ultra Short |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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