Correlation Between Hennessy Technology and Mainstay Winslow
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Mainstay Winslow 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 Mainstay Winslow 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 Mainstay Winslow Large, you can compare the effects of market volatilities on Hennessy Technology and Mainstay Winslow 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 Mainstay Winslow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Mainstay Winslow.
Diversification Opportunities for Hennessy Technology and Mainstay Winslow
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and Mainstay is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Mainstay Winslow Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Winslow Large 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 Mainstay Winslow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Winslow Large has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Mainstay Winslow go up and down completely randomly.
Pair Corralation between Hennessy Technology and Mainstay Winslow
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 1.0 times more return on investment than Mainstay Winslow. However, Hennessy Technology Fund is 1.0 times less risky than Mainstay Winslow. It trades about -0.09 of its potential returns per unit of risk. Mainstay Winslow Large is currently generating about -0.1 per unit of risk. If you would invest 2,278 in Hennessy Technology Fund on December 30, 2024 and sell it today you would lose (198.00) from holding Hennessy Technology Fund or give up 8.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hennessy Technology Fund vs. Mainstay Winslow Large
Performance |
Timeline |
Hennessy Technology |
Mainstay Winslow Large |
Hennessy Technology and Mainstay Winslow Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hennessy Technology and Mainstay Winslow
The main advantage of trading using opposite Hennessy Technology and Mainstay Winslow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Mainstay Winslow 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 Mainstay Winslow will offset losses from the drop in Mainstay Winslow's long position.Hennessy Technology vs. Black Oak Emerging | Hennessy Technology vs. Hennessy Large Cap | Hennessy Technology vs. Hennessy Japan Fund | Hennessy Technology vs. Hennessy Small Cap |
Mainstay Winslow vs. Federated Municipal Ultrashort | Mainstay Winslow vs. Transamerica Bond Class | Mainstay Winslow vs. Versatile Bond Portfolio | Mainstay Winslow vs. Goldman Sachs Short |
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.
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