Correlation Between Hennessy Technology and Simt Mid
Can any of the company-specific risk be diversified away by investing in both Hennessy Technology and Simt Mid 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 Simt Mid 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 Simt Mid Cap, you can compare the effects of market volatilities on Hennessy Technology and Simt Mid 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 Simt Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Technology and Simt Mid.
Diversification Opportunities for Hennessy Technology and Simt Mid
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hennessy and Simt is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Technology Fund and Simt Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Mid Cap 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 Simt Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Mid Cap has no effect on the direction of Hennessy Technology i.e., Hennessy Technology and Simt Mid go up and down completely randomly.
Pair Corralation between Hennessy Technology and Simt Mid
Assuming the 90 days horizon Hennessy Technology Fund is expected to generate 1.41 times more return on investment than Simt Mid. However, Hennessy Technology is 1.41 times more volatile than Simt Mid Cap. It trades about 0.33 of its potential returns per unit of risk. Simt Mid Cap is currently generating about 0.27 per unit of risk. If you would invest 1,935 in Hennessy Technology Fund on April 11, 2025 and sell it today you would earn a total of 574.00 from holding Hennessy Technology Fund or generate 29.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Technology Fund vs. Simt Mid Cap
Performance |
| Timeline |
| Hennessy Technology |
| Simt Mid Cap |
Hennessy Technology and Simt Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Technology and Simt Mid
The main advantage of trading using opposite Hennessy Technology and Simt Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Technology position performs unexpectedly, Simt Mid 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 Simt Mid will offset losses from the drop in Simt Mid's long position.| Hennessy Technology vs. Aig Government Money | Hennessy Technology vs. Elfun Government Money | Hennessy Technology vs. Putnam Money Market | Hennessy Technology vs. Vanguard Money Market |
| Simt Mid vs. Simt Multi Asset Accumulation | Simt Mid vs. Saat Market Growth | Simt Mid vs. Simt Real Return | Simt Mid vs. Simt 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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