Correlation Between Hennessy Technology and Eventide Large
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Eventide Large 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 Eventide Large 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 Eventide Large Cap, you can compare the effects of market volatilities on Hennessy Technology and Eventide Large 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 Eventide Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Eventide Large.
Diversification Opportunities for Hennessy Technology and Eventide Large
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hennessy and Eventide is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Eventide Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Large Cap 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 Eventide Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Large Cap has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Eventide Large go up and down completely randomly.
Pair Corralation between Hennessy Technology and Eventide Large
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 1.31 times more return on investment than Eventide Large. However, Hennessy Technology is 1.31 times more volatile than Eventide Large Cap. It trades about 0.08 of its potential returns per unit of risk. Eventide Large Cap is currently generating about 0.1 per unit of risk. If you would invest 1,518 in Hennessy Technology Fund on September 5, 2024 and sell it today you would earn a total of 911.00 from holding Hennessy Technology Fund or generate 60.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 79.76% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Eventide Large Cap
Performance |
| Timeline |
| Hennessy Technology |
| Eventide Large Cap |
Hennessy Technology and Eventide Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Eventide Large
The main advantage of trading using opposite Hennessy Technology and Eventide Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Eventide Large 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 Eventide Large will offset losses from the drop in Eventide Large's long position.| Hennessy Technology vs. Veea Inc | Hennessy Technology vs. VHAI | Hennessy Technology vs. VivoPower International PLC | Hennessy Technology vs. WEBTOON Entertainment Common |
| Eventide Large vs. Fisher Small Cap | Eventide Large vs. Qs Small Capitalization | Eventide Large vs. Tax Managed Mid Small | Eventide Large vs. Ab Small Cap |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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