Correlation Between Angel Oak and Hennessy
Can any of the company-specific risk be diversified away by investing in both Angel Oak 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 Angel Oak and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angel Oak Multi Strategy and Hennessy Bp Midstream, you can compare the effects of market volatilities on Angel Oak 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 Angel Oak with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angel Oak and Hennessy.
Diversification Opportunities for Angel Oak and Hennessy
Excellent diversification
The 3 months correlation between Angel and Hennessy is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Angel Oak Multi Strategy 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 Angel Oak 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 Angel Oak Multi Strategy 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 Angel Oak i.e., Angel Oak and Hennessy go up and down completely randomly.
Pair Corralation between Angel Oak and Hennessy
Assuming the 90 days horizon Angel Oak is expected to generate 66.88 times less return on investment than Hennessy. But when comparing it to its historical volatility, Angel Oak Multi Strategy is 8.21 times less risky than Hennessy. It trades about 0.09 of its potential returns per unit of risk. Hennessy Bp Midstream is currently generating about 0.71 of returns per unit of risk over similar time horizon. If you would invest 1,235 in Hennessy Bp Midstream on September 2, 2024 and sell it today you would earn a total of 208.00 from holding Hennessy Bp Midstream or generate 16.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angel Oak Multi Strategy vs. Hennessy Bp Midstream
Performance |
| Timeline |
| Angel Oak Multi |
| Hennessy Bp Midstream |
Angel Oak and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angel Oak and Hennessy
The main advantage of trading using opposite Angel Oak and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angel Oak 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.| Angel Oak vs. Calvert Developed Market | Angel Oak vs. Origin Emerging Markets | Angel Oak vs. Aqr Sustainable Long Short | Angel Oak vs. Vanguard Developed Markets |
| Hennessy vs. Angel Oak Multi Strategy | Hennessy vs. Franklin Emerging Market | Hennessy vs. Siit Emerging Markets | Hennessy vs. Barings Emerging Markets |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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