Correlation Between Siit Emerging and Hennessy Focus
Can any of the company-specific risk be diversified away by investing in both Siit Emerging 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 Siit Emerging and Hennessy Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Emerging Markets and Hennessy Focus Fund, you can compare the effects of market volatilities on Siit Emerging 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 Siit Emerging with a short position of Hennessy Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Emerging and Hennessy Focus.
Diversification Opportunities for Siit Emerging and Hennessy Focus
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Siit and Hennessy is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Siit Emerging Markets and Hennessy Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Focus and Siit Emerging 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 Siit Emerging Markets 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 Siit Emerging i.e., Siit Emerging and Hennessy Focus go up and down completely randomly.
Pair Corralation between Siit Emerging and Hennessy Focus
Assuming the 90 days horizon Siit Emerging Markets is expected to generate 0.14 times more return on investment than Hennessy Focus. However, Siit Emerging Markets is 6.97 times less risky than Hennessy Focus. It trades about 0.07 of its potential returns per unit of risk. Hennessy Focus Fund is currently generating about -0.16 per unit of risk. If you would invest 840.00 in Siit Emerging Markets on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Siit Emerging Markets or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Emerging Markets vs. Hennessy Focus Fund
Performance |
| Timeline |
| Siit Emerging Markets |
| Hennessy Focus |
Siit Emerging and Hennessy Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Emerging and Hennessy Focus
The main advantage of trading using opposite Siit Emerging and Hennessy Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Emerging 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.| Siit Emerging vs. Legg Mason Partners | Siit Emerging vs. Hartford Municipal Short | Siit Emerging vs. Nuveen Strategic Municipal | Siit Emerging vs. Jpmorgan Ultra Short Municipal |
| Hennessy Focus vs. Applied Finance Explorer | Hennessy Focus vs. Fpa Queens Road | Hennessy Focus vs. Amg River Road | Hennessy Focus vs. Vanguard Small Cap Value |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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