Correlation Between The Jensen and Hennessy Cornerstone
Can any of the company-specific risk be diversified away by investing in both The Jensen and Hennessy Cornerstone 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 The Jensen and Hennessy Cornerstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Jensen Portfolio and Hennessy Nerstone Value, you can compare the effects of market volatilities on The Jensen and Hennessy Cornerstone 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 The Jensen with a short position of Hennessy Cornerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Jensen and Hennessy Cornerstone.
Diversification Opportunities for The Jensen and Hennessy Cornerstone
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between The and Hennessy is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding The Jensen Portfolio and Hennessy Nerstone Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Nerstone Value and The Jensen 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 The Jensen Portfolio are associated (or correlated) with Hennessy Cornerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Nerstone Value has no effect on the direction of The Jensen i.e., The Jensen and Hennessy Cornerstone go up and down completely randomly.
Pair Corralation between The Jensen and Hennessy Cornerstone
Assuming the 90 days horizon The Jensen Portfolio is expected to under-perform the Hennessy Cornerstone. In addition to that, The Jensen is 3.76 times more volatile than Hennessy Nerstone Value. It trades about -0.14 of its total potential returns per unit of risk. Hennessy Nerstone Value is currently generating about 0.15 per unit of volatility. If you would invest 2,183 in Hennessy Nerstone Value on August 29, 2024 and sell it today you would earn a total of 46.00 from holding Hennessy Nerstone Value or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Jensen Portfolio vs. Hennessy Nerstone Value
Performance |
| Timeline |
| Jensen Portfolio |
| Hennessy Nerstone Value |
The Jensen and Hennessy Cornerstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Jensen and Hennessy Cornerstone
The main advantage of trading using opposite The Jensen and Hennessy Cornerstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Jensen position performs unexpectedly, Hennessy Cornerstone 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 Hennessy Cornerstone will offset losses from the drop in Hennessy Cornerstone's long position.| The Jensen vs. Clipper Fund Inc | The Jensen vs. Parnassus E Equity | The Jensen vs. Mairs Power Growth | The Jensen vs. Sound Shore Fund |
| Hennessy Cornerstone vs. Hennessy Nerstone Growth | Hennessy Cornerstone vs. Hennessy Total Return | Hennessy Cornerstone vs. Hennessy Balanced Fund | Hennessy Cornerstone vs. Hennessy Nerstone Large |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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