Correlation Between Hennessy Technology and Great-west Loomis
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Great-west Loomis 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 Great-west Loomis 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 Great West Loomis Sayles, you can compare the effects of market volatilities on Hennessy Technology and Great-west Loomis 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 Great-west Loomis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Great-west Loomis.
Diversification Opportunities for Hennessy Technology and Great-west Loomis
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and Great-west is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis 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 Great-west Loomis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Great-west Loomis go up and down completely randomly.
Pair Corralation between Hennessy Technology and Great-west Loomis
Assuming the 90 days horizon Hennessy Technology is expected to generate 1.93 times less return on investment than Great-west Loomis. But when comparing it to its historical volatility, Hennessy Technology Fund is 1.24 times less risky than Great-west Loomis. It trades about 0.16 of its potential returns per unit of risk. Great West Loomis Sayles is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,824 in Great West Loomis Sayles on August 31, 2024 and sell it today you would earn a total of 354.00 from holding Great West Loomis Sayles or generate 9.26% 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. Great West Loomis Sayles
Performance |
| Timeline |
| Hennessy Technology |
| Great West Loomis |
Hennessy Technology and Great-west Loomis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Great-west Loomis
The main advantage of trading using opposite Hennessy Technology and Great-west Loomis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Great-west Loomis 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 Great-west Loomis will offset losses from the drop in Great-west Loomis' 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 |
| Great-west Loomis vs. Goldman Sachs Technology | Great-west Loomis vs. Hennessy Technology Fund | Great-west Loomis vs. Mfs Technology Fund | Great-west Loomis vs. Columbia Global 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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