Correlation Between Hennessy Cornerstone and Roumell Opportunistic

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

By analyzing existing cross correlation between Hennessy Nerstone Mid and Roumell Opportunistic Value, you can compare the effects of market volatilities on Hennessy Cornerstone and Roumell Opportunistic 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 Cornerstone with a short position of Roumell Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Cornerstone and Roumell Opportunistic.

Diversification Opportunities for Hennessy Cornerstone and Roumell Opportunistic

0.0

Correlation Coefficient

Hennessy Cornerstone  Roumell Opportunistic

Pay attention - limited upside

The 3 months correlation between Hennessy and Roumell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Mid and Roumell Opportunistic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roumell Opportunistic and Hennessy Cornerstone 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 Mid are associated (or correlated) with Roumell Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roumell Opportunistic has no effect on the direction of Hennessy Cornerstone i.e., Hennessy Cornerstone and Roumell Opportunistic go up and down completely randomly.

Pair Corralation between Hennessy Cornerstone and Roumell Opportunistic

If you would invest  2,206  in Hennessy Nerstone Mid on February 4, 2024 and sell it today you would earn a total of  70.00  from holding Hennessy Nerstone Mid or generate 3.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hennessy Nerstone Mid  vs.  Roumell Opportunistic Value

Hennessy Nerstone Mid

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Nerstone Mid are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Hennessy Cornerstone showed solid returns over the last few months and may actually be approaching a breakup point.

Roumell Opportunistic

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with Hennessy Cornerstone and Roumell Opportunistic

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

The idea behind Hennessy Nerstone Mid and Roumell Opportunistic Value 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.