Correlation Between Hennessy Technology and The Hartford
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and The Hartford 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 The Hartford 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 The Hartford Capital, you can compare the effects of market volatilities on Hennessy Technology and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and The Hartford.
Diversification Opportunities for Hennessy Technology and The Hartford
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and The is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and The Hartford Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Capital 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Capital has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and The Hartford go up and down completely randomly.
Pair Corralation between Hennessy Technology and The Hartford
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 1.51 times more return on investment than The Hartford. However, Hennessy Technology is 1.51 times more volatile than The Hartford Capital. It trades about 0.08 of its potential returns per unit of risk. The Hartford Capital is currently generating about 0.1 per unit of risk. If you would invest 1,573 in Hennessy Technology Fund on September 2, 2024 and sell it today you would earn a total of 823.00 from holding Hennessy Technology Fund or generate 52.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. The Hartford Capital
Performance |
| Timeline |
| Hennessy Technology |
| Hartford Capital |
Hennessy Technology and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and The Hartford
The main advantage of trading using opposite Hennessy Technology and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Hennessy Technology vs. Black Oak Emerging | Hennessy Technology vs. Hennessy Japan Fund | Hennessy Technology vs. Firsthand Alternative Energy | Hennessy Technology vs. Aquagold International |
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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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