Correlation Between Hennessy Technology and Voya Floating
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Voya Floating 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 Voya Floating 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 Voya Floating Rate, you can compare the effects of market volatilities on Hennessy Technology and Voya Floating 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 Voya Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Voya Floating.
Diversification Opportunities for Hennessy Technology and Voya Floating
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hennessy and Voya is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Voya Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Floating Rate 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 Voya Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Floating Rate has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Voya Floating go up and down completely randomly.
Pair Corralation between Hennessy Technology and Voya Floating
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 21.6 times more return on investment than Voya Floating. However, Hennessy Technology is 21.6 times more volatile than Voya Floating Rate. It trades about 0.02 of its potential returns per unit of risk. Voya Floating Rate is currently generating about 0.15 per unit of risk. If you would invest 2,339 in Hennessy Technology Fund on September 15, 2024 and sell it today you would earn a total of 6.00 from holding Hennessy Technology Fund or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Voya Floating Rate
Performance |
| Timeline |
| Hennessy Technology |
| Voya Floating Rate |
Hennessy Technology and Voya Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Voya Floating
The main advantage of trading using opposite Hennessy Technology and Voya Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Voya Floating 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 Voya Floating will offset losses from the drop in Voya Floating's long position.| Hennessy Technology vs. Veea Inc | Hennessy Technology vs. VivoPower International PLC | Hennessy Technology vs. Hennessy Nerstone Growth | Hennessy Technology vs. Hennessy Nerstone Value |
| Voya Floating vs. Columbia Global Technology | Voya Floating vs. Hennessy Technology Fund | Voya Floating vs. Allianzgi Technology Fund | Voya Floating vs. Goldman Sachs 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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