Correlation Between Simt Managed and Hennessy Focus
Can any of the company-specific risk be diversified away by investing in both Simt Managed 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 Simt Managed and Hennessy Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Managed Volatility and Hennessy Focus Fund, you can compare the effects of market volatilities on Simt Managed 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 Simt Managed with a short position of Hennessy Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Managed and Hennessy Focus.
Diversification Opportunities for Simt Managed and Hennessy Focus
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Hennessy is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Simt Managed Volatility and Hennessy Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Focus and Simt Managed 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 Simt Managed Volatility 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 Simt Managed i.e., Simt Managed and Hennessy Focus go up and down completely randomly.
Pair Corralation between Simt Managed and Hennessy Focus
Assuming the 90 days horizon Simt Managed is expected to generate 3.63 times less return on investment than Hennessy Focus. But when comparing it to its historical volatility, Simt Managed Volatility is 1.6 times less risky than Hennessy Focus. It trades about 0.01 of its potential returns per unit of risk. Hennessy Focus Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,863 in Hennessy Focus Fund on August 29, 2024 and sell it today you would earn a total of 733.00 from holding Hennessy Focus Fund or generate 15.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt Managed Volatility vs. Hennessy Focus Fund
Performance |
| Timeline |
| Simt Managed Volatility |
| Hennessy Focus |
Simt Managed and Hennessy Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt Managed and Hennessy Focus
The main advantage of trading using opposite Simt Managed and Hennessy Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Managed 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.| Simt Managed vs. Victory Trivalent International | Simt Managed vs. Mfs Research Fund | Simt Managed vs. The Hartford Midcap | Simt Managed vs. Mfs International 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |