Correlation Between Hennessy Technology and Janus Global
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Janus Global 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 Janus Global 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 Janus Global Technology, you can compare the effects of market volatilities on Hennessy Technology and Janus Global 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 Janus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Janus Global.
Diversification Opportunities for Hennessy Technology and Janus Global
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hennessy and Janus is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Janus Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Global Technology 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 Janus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Global Technology has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Janus Global go up and down completely randomly.
Pair Corralation between Hennessy Technology and Janus Global
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 1.21 times more return on investment than Janus Global. However, Hennessy Technology is 1.21 times more volatile than Janus Global Technology. It trades about 0.13 of its potential returns per unit of risk. Janus Global Technology is currently generating about 0.12 per unit of risk. If you would invest 2,263 in Hennessy Technology Fund on August 25, 2024 and sell it today you would earn a total of 88.00 from holding Hennessy Technology Fund or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Janus Global Technology
Performance |
| Timeline |
| Hennessy Technology |
| Janus Global Technology |
Hennessy Technology and Janus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Janus Global
The main advantage of trading using opposite Hennessy Technology and Janus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Janus Global 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 Janus Global will offset losses from the drop in Janus Global'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 |
| Janus Global vs. Janus Global Life | Janus Global vs. Janus Research Fund | Janus Global vs. Janus Enterprise Fund | Janus Global vs. Janus Global Research |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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