Correlation Between Hennessy Technology and Forum Real
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Forum Real 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 Forum Real 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 Forum Real Estate, you can compare the effects of market volatilities on Hennessy Technology and Forum Real 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 Forum Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Forum Real.
Diversification Opportunities for Hennessy Technology and Forum Real
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hennessy and Forum is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Forum Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Real Estate 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 Forum Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Real Estate has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Forum Real go up and down completely randomly.
Pair Corralation between Hennessy Technology and Forum Real
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 18.76 times more return on investment than Forum Real. However, Hennessy Technology is 18.76 times more volatile than Forum Real Estate. It trades about 0.13 of its potential returns per unit of risk. Forum Real Estate is currently generating about 0.72 per unit of risk. If you would invest 2,278 in Hennessy Technology Fund on October 30, 2024 and sell it today you would earn a total of 63.00 from holding Hennessy Technology Fund or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Forum Real Estate
Performance |
| Timeline |
| Hennessy Technology |
| Forum Real Estate |
Hennessy Technology and Forum Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Forum Real
The main advantage of trading using opposite Hennessy Technology and Forum Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Forum Real 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 Forum Real will offset losses from the drop in Forum Real'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 |
| Forum Real vs. Red Oak Technology | Forum Real vs. Columbia Global Technology | Forum Real vs. Technology Ultrasector Profund | Forum Real vs. Blackrock Science 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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