Correlation Between AES and Hennessy Gas
Can any of the company-specific risk be diversified away by investing in both AES and Hennessy Gas 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 AES and Hennessy Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The AES and Hennessy Gas Utility, you can compare the effects of market volatilities on AES and Hennessy Gas 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 AES with a short position of Hennessy Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and Hennessy Gas.
Diversification Opportunities for AES and Hennessy Gas
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AES and Hennessy is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding The AES and Hennessy Gas Utility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Gas Utility and AES 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 The AES are associated (or correlated) with Hennessy Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Gas Utility has no effect on the direction of AES i.e., AES and Hennessy Gas go up and down completely randomly.
Pair Corralation between AES and Hennessy Gas
Considering the 90-day investment horizon The AES is expected to under-perform the Hennessy Gas. In addition to that, AES is 2.72 times more volatile than Hennessy Gas Utility. It trades about -0.01 of its total potential returns per unit of risk. Hennessy Gas Utility is currently generating about 0.06 per unit of volatility. If you would invest 2,293 in Hennessy Gas Utility on September 12, 2024 and sell it today you would earn a total of 436.00 from holding Hennessy Gas Utility or generate 19.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
The AES vs. Hennessy Gas Utility
Performance |
| Timeline |
| AES |
| Hennessy Gas Utility |
AES and Hennessy Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AES and Hennessy Gas
The main advantage of trading using opposite AES and Hennessy Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES position performs unexpectedly, Hennessy Gas 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 Gas will offset losses from the drop in Hennessy Gas' long position.The idea behind The AES and Hennessy Gas Utility 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.| Hennessy Gas vs. Utilities Fund Investor | Hennessy Gas vs. Amg Yacktman Focused | Hennessy Gas vs. Chemicals Portfolio Chemicals | Hennessy Gas vs. Invesco Energy Fund |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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