Correlation Between Alliancebernstein and Hennessy
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein 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 Alliancebernstein and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliancebernstein National Municipal and Hennessy Bp Energy, you can compare the effects of market volatilities on Alliancebernstein 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 Alliancebernstein with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Hennessy.
Diversification Opportunities for Alliancebernstein and Hennessy
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alliancebernstein and Hennessy is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Hennessy Bp Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Bp Energy and Alliancebernstein 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 Alliancebernstein National Municipal 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 Energy has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Hennessy go up and down completely randomly.
Pair Corralation between Alliancebernstein and Hennessy
Considering the 90-day investment horizon Alliancebernstein is expected to generate 4.5 times less return on investment than Hennessy. But when comparing it to its historical volatility, Alliancebernstein National Municipal is 1.69 times less risky than Hennessy. It trades about 0.13 of its potential returns per unit of risk. Hennessy Bp Energy is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,666 in Hennessy Bp Energy on September 5, 2024 and sell it today you would earn a total of 245.00 from holding Hennessy Bp Energy or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein National Mun vs. Hennessy Bp Energy
Performance |
| Timeline |
| Alliancebernstein |
| Hennessy Bp Energy |
Alliancebernstein and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Hennessy
The main advantage of trading using opposite Alliancebernstein and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein 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.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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