Correlation Between Hennessy Technology and Maingate Mlp

Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Maingate Mlp 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 Hennessy Technology and Maingate Mlp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hennessy Technology Fund and Maingate Mlp Fund, you can compare the effects of market volatilities on Hennessy Technology and Maingate Mlp 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 Hennessy Technology with a short position of Maingate Mlp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Maingate Mlp.

Diversification Opportunities for Hennessy Technology and Maingate Mlp

0.37

Correlation Coefficient

Hennessy Technology  Maingate Mlp

Weak diversification

The 3 months correlation between Hennessy and Maingate is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Maingate Mlp Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maingate Mlp and Hennessy Technology 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 Hennessy Technology Fund are associated (or correlated) with Maingate Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maingate Mlp has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Maingate Mlp go up and down completely randomly.

Pair Corralation between Hennessy Technology and Maingate Mlp

If you would invest  1,668  in Hennessy Technology Fund on October 26, 2024 and sell it today you would earn a total of  735.00  from holding Hennessy Technology Fund or generate 44.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Hennessy Technology Fund  vs.  Maingate Mlp Fund

Hennessy Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Technology Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Hennessy Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Maingate Mlp

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Maingate Mlp Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Maingate Mlp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hennessy Technology and Maingate Mlp

The main advantage of trading using opposite Hennessy Technology and Maingate Mlp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Maingate Mlp 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 Maingate Mlp will offset losses from the drop in Maingate Mlp's long position.

The idea behind Hennessy Technology Fund and Maingate Mlp Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.