Correlation Between Hennessy Technology and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Fidelity Series 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 Fidelity Series 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 Fidelity Series International, you can compare the effects of market volatilities on Hennessy Technology and Fidelity Series 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 Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Fidelity Series.
Diversification Opportunities for Hennessy Technology and Fidelity Series
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hennessy and Fidelity is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Fidelity Series International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Inte 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 Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Inte has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Fidelity Series go up and down completely randomly.
Pair Corralation between Hennessy Technology and Fidelity Series
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 1.67 times more return on investment than Fidelity Series. However, Hennessy Technology is 1.67 times more volatile than Fidelity Series International. It trades about 0.08 of its potential returns per unit of risk. Fidelity Series International is currently generating about -0.09 per unit of risk. If you would invest 2,252 in Hennessy Technology Fund on August 24, 2024 and sell it today you would earn a total of 52.00 from holding Hennessy Technology Fund or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Fidelity Series International
Performance |
| Timeline |
| Hennessy Technology |
| Fidelity Series Inte |
Hennessy Technology and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Fidelity Series
The main advantage of trading using opposite Hennessy Technology and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Fidelity Series 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 Fidelity Series will offset losses from the drop in Fidelity Series' 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 |
| Fidelity Series vs. Red Oak Technology | Fidelity Series vs. Invesco Technology Fund | Fidelity Series vs. Science Technology Fund | Fidelity Series vs. Hennessy Technology Fund |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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