Correlation Between Siit High and Hennessy Technology
Can any of the company-specific risk be diversified away by investing in both Siit High and Hennessy Technology 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 High and Hennessy Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit High Yield and Hennessy Technology Fund, you can compare the effects of market volatilities on Siit High and Hennessy Technology 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 High with a short position of Hennessy Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Hennessy Technology.
Diversification Opportunities for Siit High and Hennessy Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Siit and Hennessy is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Hennessy Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Technology and Siit High 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 High Yield are associated (or correlated) with Hennessy Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Technology has no effect on the direction of Siit High i.e., Siit High and Hennessy Technology go up and down completely randomly.
Pair Corralation between Siit High and Hennessy Technology
Assuming the 90 days horizon Siit High Yield is expected to generate 0.12 times more return on investment than Hennessy Technology. However, Siit High Yield is 8.53 times less risky than Hennessy Technology. It trades about 0.28 of its potential returns per unit of risk. Hennessy Technology Fund is currently generating about 0.01 per unit of risk. If you would invest 711.00 in Siit High Yield on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Siit High Yield or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit High Yield vs. Hennessy Technology Fund
Performance |
| Timeline |
| Siit High Yield |
| Hennessy Technology |
Siit High and Hennessy Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Hennessy Technology
The main advantage of trading using opposite Siit High and Hennessy Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Hennessy Technology 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 Technology will offset losses from the drop in Hennessy Technology's long position.| Siit High vs. Artisan High Income | Siit High vs. Sit Emerging Markets | Siit High vs. Sit International Equity | Siit High vs. Stet Intermediate Term |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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