Correlation Between Parnassus Endeavor and Hennessy Focus
Can any of the company-specific risk be diversified away by investing in both Parnassus Endeavor and Hennessy Focus 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 Parnassus Endeavor and Hennessy Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parnassus Endeavor Fund and Hennessy Focus Fund, you can compare the effects of market volatilities on Parnassus Endeavor and Hennessy Focus 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 Parnassus Endeavor with a short position of Hennessy Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parnassus Endeavor and Hennessy Focus.
Diversification Opportunities for Parnassus Endeavor and Hennessy Focus
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Parnassus and Hennessy is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Parnassus Endeavor Fund and Hennessy Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Focus and Parnassus Endeavor 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 Parnassus Endeavor Fund are associated (or correlated) with Hennessy Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Focus has no effect on the direction of Parnassus Endeavor i.e., Parnassus Endeavor and Hennessy Focus go up and down completely randomly.
Pair Corralation between Parnassus Endeavor and Hennessy Focus
Assuming the 90 days horizon Parnassus Endeavor Fund is expected to generate 0.74 times more return on investment than Hennessy Focus. However, Parnassus Endeavor Fund is 1.35 times less risky than Hennessy Focus. It trades about 0.39 of its potential returns per unit of risk. Hennessy Focus Fund is currently generating about 0.28 per unit of risk. If you would invest 5,632 in Parnassus Endeavor Fund on September 1, 2024 and sell it today you would earn a total of 350.00 from holding Parnassus Endeavor Fund or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parnassus Endeavor Fund vs. Hennessy Focus Fund
Performance |
| Timeline |
| Parnassus Endeavor |
| Hennessy Focus |
Parnassus Endeavor and Hennessy Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parnassus Endeavor and Hennessy Focus
The main advantage of trading using opposite Parnassus Endeavor and Hennessy Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parnassus Endeavor position performs unexpectedly, Hennessy Focus 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 Focus will offset losses from the drop in Hennessy Focus' long position.| Parnassus Endeavor vs. Parnassus Mid Cap | Parnassus Endeavor vs. Parnassus E Equity | Parnassus Endeavor vs. Parnassus Fund Investor | Parnassus Endeavor vs. Large Cap Growth |
| Hennessy Focus vs. Hennessy Nerstone Mid | Hennessy Focus vs. Amg Yacktman Focused | Hennessy Focus vs. Parnassus Endeavor Fund | Hennessy Focus vs. Hennessy Small 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |