Correlation Between Apptech Corp and Hennessy Technology

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

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

Diversification Opportunities for Apptech Corp and Hennessy Technology

-0.73

Correlation Coefficient

Apptech Corp  Hennessy Technology

Pay attention - limited upside

The 3 months correlation between Apptech and Hennessy is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Apptech Corp and Hennessy Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Technology and Apptech Corp 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 Apptech Corp 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 Apptech Corp i.e., Apptech Corp and Hennessy Technology go up and down completely randomly.

Pair Corralation between Apptech Corp and Hennessy Technology

Given the investment horizon of 90 days Apptech Corp is expected to generate 31.11 times more return on investment than Hennessy Technology. However, Apptech Corp is 31.11 times more volatile than Hennessy Technology Fund. It trades about 0.14 of its potential returns per unit of risk. Hennessy Technology Fund is currently generating about 0.21 per unit of risk. If you would invest  28.00  in Apptech Corp on May 2, 2025 and sell it today you would earn a total of  2.00  from holding Apptech Corp or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	39.34%
Values	Daily Returns

Apptech Corp  vs.  Hennessy Technology Fund

Apptech Corp

Risk-Adjusted Performance

OK

Over the last 90 days Apptech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal fundamental indicators, Apptech Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Hennessy Technology

Risk-Adjusted Performance

Solid

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

Pair Trading with Apptech Corp and Hennessy Technology

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

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.