Correlation Between Hennessy Nerstone and Ariel International
Can any of the company-specific risk be diversified away by investing in both Hennessy Nerstone and Ariel International 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 Nerstone and Ariel International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Nerstone Growth and Ariel International Fund, you can compare the effects of market volatilities on Hennessy Nerstone and Ariel International 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 Nerstone with a short position of Ariel International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Nerstone and Ariel International.
Diversification Opportunities for Hennessy Nerstone and Ariel International
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hennessy and Ariel is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Growth and Ariel International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ariel International and Hennessy Nerstone 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 Nerstone Growth are associated (or correlated) with Ariel International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ariel International has no effect on the direction of Hennessy Nerstone i.e., Hennessy Nerstone and Ariel International go up and down completely randomly.
Pair Corralation between Hennessy Nerstone and Ariel International
Assuming the 90 days horizon Hennessy Nerstone is expected to generate 3.37 times less return on investment than Ariel International. In addition to that, Hennessy Nerstone is 1.01 times more volatile than Ariel International Fund. It trades about 0.02 of its total potential returns per unit of risk. Ariel International Fund is currently generating about 0.08 per unit of volatility. If you would invest 1,787 in Ariel International Fund on August 15, 2025 and sell it today you would earn a total of 60.00 from holding Ariel International Fund or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Nerstone Growth vs. Ariel International Fund
Performance |
| Timeline |
| Hennessy Nerstone Growth |
| Ariel International |
Hennessy Nerstone and Ariel International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Nerstone and Ariel International
The main advantage of trading using opposite Hennessy Nerstone and Ariel International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Nerstone position performs unexpectedly, Ariel International 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 Ariel International will offset losses from the drop in Ariel International's long position.| Hennessy Nerstone vs. First American Investment | Hennessy Nerstone vs. Ariel International Fund | Hennessy Nerstone vs. Cohen Steers International | Hennessy Nerstone vs. Prudential Qma International |
| Ariel International vs. Hennessy Nerstone Growth | Ariel International vs. Cohen Steers International | Ariel International vs. Prudential Qma International | Ariel International vs. First American 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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