Correlation Between Hennessy Technology and Sit Esg
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Sit Esg 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 Sit Esg 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 Sit Esg Growth, you can compare the effects of market volatilities on Hennessy Technology and Sit Esg 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 Sit Esg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Sit Esg.
Diversification Opportunities for Hennessy Technology and Sit Esg
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and SIT is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Sit Esg Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Esg Growth 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 Sit Esg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Esg Growth has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Sit Esg go up and down completely randomly.
Pair Corralation between Hennessy Technology and Sit Esg
Assuming the 90 days horizon Hennessy Technology is expected to generate 1.01 times less return on investment than Sit Esg. In addition to that, Hennessy Technology is 1.5 times more volatile than Sit Esg Growth. It trades about 0.07 of its total potential returns per unit of risk. Sit Esg Growth is currently generating about 0.1 per unit of volatility. If you would invest 1,713 in Sit Esg Growth on September 2, 2024 and sell it today you would earn a total of 570.00 from holding Sit Esg Growth or generate 33.27% 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. Sit Esg Growth
Performance |
| Timeline |
| Hennessy Technology |
| Sit Esg Growth |
Hennessy Technology and Sit Esg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Sit Esg
The main advantage of trading using opposite Hennessy Technology and Sit Esg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Sit Esg 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 Sit Esg will offset losses from the drop in Sit Esg'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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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