Correlation Between Aim Investment and Hennessy Technology

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

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

Diversification Opportunities for Aim Investment and Hennessy Technology

0.0

Correlation Coefficient

Aim Investment  Hennessy Technology

Pay attention - limited upside

The 3 months correlation between Aim and Hennessy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aim Investment Securities and Hennessy Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Technology and Aim Investment 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 Aim Investment Securities 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 Aim Investment i.e., Aim Investment and Hennessy Technology go up and down completely randomly.

Pair Corralation between Aim Investment and Hennessy Technology

If you would invest  100.00  in Aim Investment Securities on December 19, 2024 and sell it today you would earn a total of  0.00  from holding Aim Investment Securities or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Aim Investment Securities  vs.  Hennessy Technology Fund

Aim Investment Securities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aim Investment Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Aim Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hennessy Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hennessy Technology Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Hennessy Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aim Investment and Hennessy Technology

The main advantage of trading using opposite Aim Investment and Hennessy Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Investment 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.

The idea behind Aim Investment Securities and Hennessy Technology 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.