Correlation Between Hennessy Technology and Blackrock International
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Blackrock International 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 Blackrock International 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 Blackrock International Instl, you can compare the effects of market volatilities on Hennessy Technology and Blackrock International 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 Blackrock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Blackrock International.
Diversification Opportunities for Hennessy Technology and Blackrock International
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hennessy and Blackrock is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Blackrock International Instl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International 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 Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Blackrock International go up and down completely randomly.
Pair Corralation between Hennessy Technology and Blackrock International
Assuming the 90 days horizon Hennessy Technology is expected to generate 1.01 times less return on investment than Blackrock International. In addition to that, Hennessy Technology is 1.43 times more volatile than Blackrock International Instl. It trades about 0.19 of its total potential returns per unit of risk. Blackrock International Instl is currently generating about 0.27 per unit of volatility. If you would invest 1,960 in Blackrock International Instl on November 4, 2024 and sell it today you would earn a total of 85.00 from holding Blackrock International Instl or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Blackrock International Instl
Performance |
| Timeline |
| Hennessy Technology |
| Blackrock International |
Hennessy Technology and Blackrock International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Blackrock International
The main advantage of trading using opposite Hennessy Technology and Blackrock International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Blackrock International 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 Blackrock International will offset losses from the drop in Blackrock International'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 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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