Correlation Between Hennessy Technology and Vanguard Mid
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Vanguard 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 Vanguard 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 Vanguard Mid Cap Value, you can compare the effects of market volatilities on Hennessy Technology and Vanguard 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 Vanguard Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Vanguard Mid.
Diversification Opportunities for Hennessy Technology and Vanguard Mid
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hennessy and Vanguard is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Vanguard Mid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard 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 Vanguard Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mid Cap has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Vanguard Mid go up and down completely randomly.
Pair Corralation between Hennessy Technology and Vanguard Mid
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 2.87 times more return on investment than Vanguard Mid. However, Hennessy Technology is 2.87 times more volatile than Vanguard Mid Cap Value. It trades about 0.03 of its potential returns per unit of risk. Vanguard Mid Cap Value is currently generating about -0.12 per unit of risk. If you would invest 2,359 in Hennessy Technology Fund on September 14, 2024 and sell it today you would earn a total of 20.00 from holding Hennessy Technology Fund or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Vanguard Mid Cap Value
Performance |
| Timeline |
| Hennessy Technology |
| Vanguard Mid Cap |
Hennessy Technology and Vanguard Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Vanguard Mid
The main advantage of trading using opposite Hennessy Technology and Vanguard Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Vanguard 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 Vanguard Mid will offset losses from the drop in Vanguard 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 |
| Vanguard Mid vs. Hennessy Technology Fund | Vanguard Mid vs. Towpath Technology | Vanguard Mid vs. Science Technology Fund | Vanguard Mid vs. Dreyfus Technology Growth |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Correlations Find global opportunities by holding instruments from different markets |