Correlation Between Hennessy Technology and Muzinich Credit
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Muzinich Credit 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 Muzinich Credit 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 Muzinich Credit Opportunities, you can compare the effects of market volatilities on Hennessy Technology and Muzinich Credit 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 Muzinich Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Muzinich Credit.
Diversification Opportunities for Hennessy Technology and Muzinich Credit
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hennessy and Muzinich is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Muzinich Credit Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muzinich Credit Oppo 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 Muzinich Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muzinich Credit Oppo has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Muzinich Credit go up and down completely randomly.
Pair Corralation between Hennessy Technology and Muzinich Credit
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 6.01 times more return on investment than Muzinich Credit. However, Hennessy Technology is 6.01 times more volatile than Muzinich Credit Opportunities. It trades about 0.2 of its potential returns per unit of risk. Muzinich Credit Opportunities is currently generating about 0.12 per unit of risk. If you would invest 2,303 in Hennessy Technology Fund on October 24, 2024 and sell it today you would earn a total of 91.00 from holding Hennessy Technology Fund or generate 3.95% 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. Muzinich Credit Opportunities
Performance |
| Timeline |
| Hennessy Technology |
| Muzinich Credit Oppo |
Hennessy Technology and Muzinich Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Muzinich Credit
The main advantage of trading using opposite Hennessy Technology and Muzinich Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Muzinich Credit 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 Muzinich Credit will offset losses from the drop in Muzinich Credit'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 |
| Muzinich Credit vs. Diversified Income Fund | Muzinich Credit vs. Muzinich Credit Opportunities | Muzinich Credit vs. Muzinich High Yield | Muzinich Credit vs. Muzinich High Yield |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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