Correlation Between Atlantica Sustainable and Hennessy Gas
Can any of the company-specific risk be diversified away by investing in both Atlantica Sustainable 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 Atlantica Sustainable and Hennessy Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantica Sustainable Infrastructure and Hennessy Gas Utility, you can compare the effects of market volatilities on Atlantica Sustainable 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 Atlantica Sustainable with a short position of Hennessy Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantica Sustainable and Hennessy Gas.
Diversification Opportunities for Atlantica Sustainable and Hennessy Gas
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlantica and Hennessy is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Atlantica Sustainable Infrastr 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 Atlantica Sustainable 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 Atlantica Sustainable Infrastructure 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 Atlantica Sustainable i.e., Atlantica Sustainable and Hennessy Gas go up and down completely randomly.
Pair Corralation between Atlantica Sustainable and Hennessy Gas
Allowing for the 90-day total investment horizon Atlantica Sustainable is expected to generate 16.87 times less return on investment than Hennessy Gas. But when comparing it to its historical volatility, Atlantica Sustainable Infrastructure is 21.64 times less risky than Hennessy Gas. It trades about 0.55 of its potential returns per unit of risk. Hennessy Gas Utility is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 2,720 in Hennessy Gas Utility on September 5, 2024 and sell it today you would earn a total of 226.00 from holding Hennessy Gas Utility or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Atlantica Sustainable Infrastr vs. Hennessy Gas Utility
Performance |
| Timeline |
| Atlantica Sustainable |
| Hennessy Gas Utility |
Atlantica Sustainable and Hennessy Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantica Sustainable and Hennessy Gas
The main advantage of trading using opposite Atlantica Sustainable and Hennessy Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantica Sustainable 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.| Atlantica Sustainable vs. Clearway Energy | Atlantica Sustainable vs. Brookfield Renewable Corp | Atlantica Sustainable vs. Nextera Energy Partners | Atlantica Sustainable vs. Brookfield Renewable Partners |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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