Correlation Between Hennessy Technology and Multi-index 2050
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Multi-index 2050 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 Multi-index 2050 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 Multi Index 2050 Lifetime, you can compare the effects of market volatilities on Hennessy Technology and Multi-index 2050 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 Multi-index 2050. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Multi-index 2050.
Diversification Opportunities for Hennessy Technology and Multi-index 2050
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and Multi-index is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Multi Index 2050 Lifetime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Index 2050 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 Multi-index 2050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Index 2050 has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Multi-index 2050 go up and down completely randomly.
Pair Corralation between Hennessy Technology and Multi-index 2050
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 1.68 times more return on investment than Multi-index 2050. However, Hennessy Technology is 1.68 times more volatile than Multi Index 2050 Lifetime. It trades about 0.08 of its potential returns per unit of risk. Multi Index 2050 Lifetime is currently generating about 0.11 per unit of risk. If you would invest 2,105 in Hennessy Technology Fund on September 3, 2024 and sell it today you would earn a total of 291.00 from holding Hennessy Technology Fund or generate 13.82% 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. Multi Index 2050 Lifetime
Performance |
| Timeline |
| Hennessy Technology |
| Multi Index 2050 |
Hennessy Technology and Multi-index 2050 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Multi-index 2050
The main advantage of trading using opposite Hennessy Technology and Multi-index 2050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Multi-index 2050 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 Multi-index 2050 will offset losses from the drop in Multi-index 2050'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 |
| Multi-index 2050 vs. Maryland Short Term Tax Free | Multi-index 2050 vs. Federated Short Term Income | Multi-index 2050 vs. Touchstone Ultra Short | Multi-index 2050 vs. Siit Ultra Short |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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