Correlation Between Ep Emerging and Hennessy
Can any of the company-specific risk be diversified away by investing in both Ep Emerging 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 Ep Emerging and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ep Emerging Markets and Hennessy Bp Midstream, you can compare the effects of market volatilities on Ep Emerging 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 Ep Emerging with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Hennessy.
Diversification Opportunities for Ep Emerging and Hennessy
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EPEIX and Hennessy is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets 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 Ep Emerging 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 Ep Emerging Markets 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 Ep Emerging i.e., Ep Emerging and Hennessy go up and down completely randomly.
Pair Corralation between Ep Emerging and Hennessy
Assuming the 90 days horizon Ep Emerging is expected to generate 11.63 times less return on investment than Hennessy. In addition to that, Ep Emerging is 1.0 times more volatile than Hennessy Bp Midstream. It trades about 0.02 of its total potential returns per unit of risk. Hennessy Bp Midstream is currently generating about 0.18 per unit of volatility. If you would invest 1,191 in Hennessy Bp Midstream on September 12, 2024 and sell it today you would earn a total of 150.00 from holding Hennessy Bp Midstream or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ep Emerging Markets vs. Hennessy Bp Midstream
Performance |
| Timeline |
| Ep Emerging Markets |
| Hennessy Bp Midstream |
Ep Emerging and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and Hennessy
The main advantage of trading using opposite Ep Emerging and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging 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.| Ep Emerging vs. Oaktree Diversifiedome | Ep Emerging vs. Sentinel Small Pany | Ep Emerging vs. Davenport Small Cap | Ep Emerging vs. Fidelity Advisor Diversified |
| Hennessy vs. Dreyfusstandish Global Fixed | Hennessy vs. Artisan Global Unconstrained | Hennessy vs. Barings Global Floating | Hennessy vs. Ab Global Real |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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