Correlation Between Shelton Core and Hennessy
Can any of the company-specific risk be diversified away by investing in both Shelton Core 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 Shelton Core and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton E Value and Hennessy Bp Energy, you can compare the effects of market volatilities on Shelton Core 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 Shelton Core with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Core and Hennessy.
Diversification Opportunities for Shelton Core and Hennessy
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shelton and Hennessy is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shelton E Value 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 Shelton Core 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 Shelton E Value 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 Shelton Core i.e., Shelton Core and Hennessy go up and down completely randomly.
Pair Corralation between Shelton Core and Hennessy
Assuming the 90 days horizon Shelton E Value is expected to generate 0.43 times more return on investment than Hennessy. However, Shelton E Value is 2.32 times less risky than Hennessy. It trades about 0.11 of its potential returns per unit of risk. Hennessy Bp Energy is currently generating about 0.04 per unit of risk. If you would invest 1,236 in Shelton E Value on August 29, 2024 and sell it today you would earn a total of 465.00 from holding Shelton E Value or generate 37.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton E Value vs. Hennessy Bp Energy
Performance |
| Timeline |
| Shelton E Value |
| Hennessy Bp Energy |
Shelton Core and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Core and Hennessy
The main advantage of trading using opposite Shelton Core and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Core 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.| Shelton Core vs. Hennessy Bp Energy | Shelton Core vs. Franklin Natural Resources | Shelton Core vs. Tortoise Energy Independence | Shelton Core vs. Oil Gas Ultrasector |
| Hennessy vs. HUMANA INC | Hennessy vs. Aquagold International | Hennessy vs. Barloworld Ltd ADR | Hennessy vs. Morningstar Unconstrained Allocation |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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