Correlation Between Hennessy Technology and Guggenheim Mid
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Guggenheim Mid 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 Guggenheim Mid 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 Guggenheim Mid Cap, you can compare the effects of market volatilities on Hennessy Technology and Guggenheim Mid 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 Guggenheim Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Guggenheim Mid.
Diversification Opportunities for Hennessy Technology and Guggenheim Mid
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and Guggenheim is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Guggenheim Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Mid Cap 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 Guggenheim Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Mid Cap has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Guggenheim Mid go up and down completely randomly.
Pair Corralation between Hennessy Technology and Guggenheim Mid
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 2.54 times more return on investment than Guggenheim Mid. However, Hennessy Technology is 2.54 times more volatile than Guggenheim Mid Cap. It trades about -0.03 of its potential returns per unit of risk. Guggenheim Mid Cap is currently generating about -0.1 per unit of risk. If you would invest 2,384 in Hennessy Technology Fund on September 13, 2024 and sell it today you would lose (29.00) from holding Hennessy Technology Fund or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Guggenheim Mid Cap
Performance |
| Timeline |
| Hennessy Technology |
| Guggenheim Mid Cap |
Hennessy Technology and Guggenheim Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Guggenheim Mid
The main advantage of trading using opposite Hennessy Technology and Guggenheim Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Guggenheim Mid 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 Guggenheim Mid will offset losses from the drop in Guggenheim Mid'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 |
| Guggenheim Mid vs. Guggenheim Directional Allocation | Guggenheim Mid vs. Guggenheim Directional Allocation | Guggenheim Mid vs. Guggenheim Directional Allocation | Guggenheim Mid vs. Guggenheim Rbp 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |