Correlation Between Westcore Global and Hennessy Technology
Can any of the company-specific risk be diversified away by investing in both Westcore Global 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 Westcore Global and Hennessy Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westcore Global Large Cap and Hennessy Technology Fund, you can compare the effects of market volatilities on Westcore Global 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 Westcore Global with a short position of Hennessy Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westcore Global and Hennessy Technology.
Diversification Opportunities for Westcore Global and Hennessy Technology
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westcore and Hennessy is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Westcore Global Large Cap and Hennessy Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Technology and Westcore Global 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 Westcore Global Large Cap 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 Westcore Global i.e., Westcore Global and Hennessy Technology go up and down completely randomly.
Pair Corralation between Westcore Global and Hennessy Technology
Assuming the 90 days horizon Westcore Global Large Cap is expected to under-perform the Hennessy Technology. But the mutual fund apears to be less risky and, when comparing its historical volatility, Westcore Global Large Cap is 1.55 times less risky than Hennessy Technology. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Hennessy Technology Fund is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,182 in Hennessy Technology Fund on December 4, 2024 and sell it today you would earn a total of 6.00 from holding Hennessy Technology Fund or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Westcore Global Large Cap vs. Hennessy Technology Fund
Performance |
| Timeline |
| Westcore Global Large |
| Hennessy Technology |
Westcore Global and Hennessy Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westcore Global and Hennessy Technology
The main advantage of trading using opposite Westcore Global and Hennessy Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westcore Global 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.| Westcore Global vs. Towpath Technology | Westcore Global vs. Dreyfus Technology Growth | Westcore Global vs. Goldman Sachs Technology | Westcore Global vs. Science Technology Fund |
| Hennessy Technology vs. Black Oak Emerging | Hennessy Technology vs. Hennessy Large Cap | Hennessy Technology vs. Hennessy Japan Fund | Hennessy Technology 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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