Correlation Between Hennessy Technology and Pimco Total
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Pimco Total 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 Pimco Total 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 Pimco Total Return, you can compare the effects of market volatilities on Hennessy Technology and Pimco Total 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 Pimco Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Pimco Total.
Diversification Opportunities for Hennessy Technology and Pimco Total
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hennessy and Pimco is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Pimco Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Total Return 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 Pimco Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Total Return has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Pimco Total go up and down completely randomly.
Pair Corralation between Hennessy Technology and Pimco Total
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 3.07 times more return on investment than Pimco Total. However, Hennessy Technology is 3.07 times more volatile than Pimco Total Return. It trades about 0.26 of its potential returns per unit of risk. Pimco Total Return is currently generating about 0.28 per unit of risk. If you would invest 2,290 in Hennessy Technology Fund on November 9, 2024 and sell it today you would earn a total of 142.00 from holding Hennessy Technology Fund or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Pimco Total Return
Performance |
| Timeline |
| Hennessy Technology |
| Pimco Total Return |
Hennessy Technology and Pimco Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Pimco Total
The main advantage of trading using opposite Hennessy Technology and Pimco Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Pimco Total 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 Pimco Total will offset losses from the drop in Pimco Total'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 |
| Pimco Total vs. Transamerica Large Cap | Pimco Total vs. Americafirst Large Cap | Pimco Total vs. Tax Managed Large Cap | Pimco Total vs. Qs Large 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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