Correlation Between Hennessy Focus and Hennessy

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

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

Diversification Opportunities for Hennessy Focus and Hennessy

-0.51

Correlation Coefficient

Hennessy Focus  Hennessy

Excellent diversification

The 3 months correlation between Hennessy and Hennessy is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Focus Fund and Hennessy Bp Midstream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Bp Midstream and Hennessy Focus 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 Focus Fund are associated (or correlated) with Hennessy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Bp Midstream has no effect on the direction of Hennessy Focus i.e., Hennessy Focus and Hennessy go up and down completely randomly.

Pair Corralation between Hennessy Focus and Hennessy

Assuming the 90 days horizon Hennessy Focus Fund is expected to generate 1.45 times more return on investment than Hennessy. However, Hennessy Focus is 1.45 times more volatile than Hennessy Bp Midstream. It trades about 0.24 of its potential returns per unit of risk. Hennessy Bp Midstream is currently generating about 0.03 per unit of risk. If you would invest  4,133  in Hennessy Focus Fund on May 5, 2025 and sell it today you would earn a total of  943.00  from holding Hennessy Focus Fund or generate 22.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hennessy Focus Fund  vs.  Hennessy Bp Midstream

Hennessy Focus

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Focus Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hennessy Focus showed solid returns over the last few months and may actually be approaching a breakup point.

Hennessy Bp Midstream

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Bp Midstream are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Hennessy 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 Focus and Hennessy

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

The idea behind Hennessy Focus Fund and Hennessy Bp Midstream 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.