Correlation Between Ab Global and Hennessy
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Ab Global and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Real and Hennessy Bp Midstream, you can compare the effects of market volatilities on Ab Global 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 Ab Global with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Hennessy.
Diversification Opportunities for Ab Global and Hennessy
Very good diversification
The 3 months correlation between AEEIX and Hennessy is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real 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 Ab Global 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 Ab Global Real 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 Ab Global i.e., Ab Global and Hennessy go up and down completely randomly.
Pair Corralation between Ab Global and Hennessy
Assuming the 90 days horizon Ab Global Real is expected to under-perform the Hennessy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Global Real is 1.15 times less risky than Hennessy. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Hennessy Bp Midstream is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,370 in Hennessy Bp Midstream on October 7, 2024 and sell it today you would lose (13.00) from holding Hennessy Bp Midstream or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Real vs. Hennessy Bp Midstream
Performance |
| Timeline |
| Ab Global Real |
| Hennessy Bp Midstream |
Ab Global and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Hennessy
The main advantage of trading using opposite Ab Global and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.| Ab Global vs. Atac Inflation Rotation | Ab Global vs. Short Duration Inflation | Ab Global vs. Lord Abbett Inflation | Ab Global vs. Ab Bond Inflation |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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