Correlation Between Investcorp Credit and Hennessy

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

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

Diversification Opportunities for Investcorp Credit and Hennessy

0.26

Correlation Coefficient

Investcorp Credit  Hennessy

Modest diversification

The 3 months correlation between Investcorp and Hennessy is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Investcorp Credit Management and Hennessy Ad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Ad and Investcorp Credit 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 Investcorp Credit Management 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 Ad has no effect on the direction of Investcorp Credit i.e., Investcorp Credit and Hennessy go up and down completely randomly.

Pair Corralation between Investcorp Credit and Hennessy

Given the investment horizon of 90 days Investcorp Credit is expected to generate 2.84 times less return on investment than Hennessy. But when comparing it to its historical volatility, Investcorp Credit Management is 1.11 times less risky than Hennessy. It trades about 0.06 of its potential returns per unit of risk. Hennessy Ad is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,045  in Hennessy Ad on May 6, 2025 and sell it today you would earn a total of  195.00  from holding Hennessy Ad or generate 18.66% return on investment over 90 days.

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

Investcorp Credit Management  vs.  Hennessy Ad

Investcorp Credit

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp Credit Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Investcorp Credit may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Hennessy Ad

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Ad are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Hennessy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Investcorp Credit and Hennessy

The main advantage of trading using opposite Investcorp Credit and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investcorp Credit 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 Investcorp Credit Management and Hennessy Ad 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.