Correlation Between Hennessy Technology and Mfs International
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Mfs 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 Mfs 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 Mfs International Large, you can compare the effects of market volatilities on Hennessy Technology and Mfs 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Mfs International.
Diversification Opportunities for Hennessy Technology and Mfs International
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hennessy and Mfs is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Mfs International Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Large 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Large has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Mfs International go up and down completely randomly.
Pair Corralation between Hennessy Technology and Mfs International
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 1.53 times more return on investment than Mfs International. However, Hennessy Technology is 1.53 times more volatile than Mfs International Large. It trades about 0.07 of its potential returns per unit of risk. Mfs International Large is currently generating about 0.06 per unit of risk. If you would invest 1,826 in Hennessy Technology Fund on September 4, 2024 and sell it today you would earn a total of 603.00 from holding Hennessy Technology Fund or generate 33.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Mfs International Large
Performance |
| Timeline |
| Hennessy Technology |
| Mfs International Large |
Hennessy Technology and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Mfs International
The main advantage of trading using opposite Hennessy Technology and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Mfs 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 Mfs International will offset losses from the drop in Mfs 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 |
| Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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