Correlation Between Calvert Short and Hennessy
Can any of the company-specific risk be diversified away by investing in both Calvert Short 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 Calvert Short and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Short Duration and Hennessy Bp Energy, you can compare the effects of market volatilities on Calvert Short 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 Calvert Short with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Short and Hennessy.
Diversification Opportunities for Calvert Short and Hennessy
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calvert and Hennessy is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Short Duration 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 Calvert Short 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 Calvert Short Duration 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 Calvert Short i.e., Calvert Short and Hennessy go up and down completely randomly.
Pair Corralation between Calvert Short and Hennessy
Assuming the 90 days horizon Calvert Short is expected to generate 4.57 times less return on investment than Hennessy. But when comparing it to its historical volatility, Calvert Short Duration is 7.53 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 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,373 in Hennessy Bp Energy on August 25, 2024 and sell it today you would earn a total of 511.00 from holding Hennessy Bp Energy or generate 21.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Short Duration vs. Hennessy Bp Energy
Performance |
| Timeline |
| Calvert Short Duration |
| Hennessy Bp Energy |
Calvert Short and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Short and Hennessy
The main advantage of trading using opposite Calvert Short and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Short 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.| Calvert Short vs. Hennessy Bp Energy | Calvert Short vs. Goehring Rozencwajg Resources | Calvert Short vs. Alpsalerian Energy Infrastructure | Calvert Short vs. Energy Basic Materials |
| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
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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