Correlation Between Hennessy Technology and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Eaton Vance 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 Eaton Vance 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 Eaton Vance Municipal, you can compare the effects of market volatilities on Hennessy Technology and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Eaton Vance.
Diversification Opportunities for Hennessy Technology and Eaton Vance
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hennessy and Eaton is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Municipal has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Eaton Vance go up and down completely randomly.
Pair Corralation between Hennessy Technology and Eaton Vance
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 5.02 times more return on investment than Eaton Vance. However, Hennessy Technology is 5.02 times more volatile than Eaton Vance Municipal. It trades about 0.07 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.07 per unit of risk. If you would invest 1,669 in Hennessy Technology Fund on September 1, 2024 and sell it today you would earn a total of 727.00 from holding Hennessy Technology Fund or generate 43.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Eaton Vance Municipal
Performance |
| Timeline |
| Hennessy Technology |
| Eaton Vance Municipal |
Hennessy Technology and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Eaton Vance
The main advantage of trading using opposite Hennessy Technology and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 |
| Eaton Vance vs. Aqr Risk Balanced Modities | Eaton Vance vs. Ab High Income | Eaton Vance vs. Artisan High Income | Eaton Vance vs. Ab Global Risk |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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