Correlation Between ESGEN Acquisition and Hennessy Capital
Can any of the company-specific risk be diversified away by investing in both ESGEN Acquisition and Hennessy Capital 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 ESGEN Acquisition and Hennessy Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESGEN Acquisition Corp and Hennessy Capital Investment, you can compare the effects of market volatilities on ESGEN Acquisition and Hennessy Capital 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 ESGEN Acquisition with a short position of Hennessy Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESGEN Acquisition and Hennessy Capital.
Diversification Opportunities for ESGEN Acquisition and Hennessy Capital
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between ESGEN and Hennessy is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding ESGEN Acquisition Corp and Hennessy Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Capital Inv and ESGEN Acquisition 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 ESGEN Acquisition Corp are associated (or correlated) with Hennessy Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Capital Inv has no effect on the direction of ESGEN Acquisition i.e., ESGEN Acquisition and Hennessy Capital go up and down completely randomly.
Pair Corralation between ESGEN Acquisition and Hennessy Capital
If you would invest 1,053 in Hennessy Capital Investment on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Hennessy Capital Investment or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
ESGEN Acquisition Corp vs. Hennessy Capital Investment
Performance |
| Timeline |
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hennessy Capital Inv |
ESGEN Acquisition and Hennessy Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESGEN Acquisition and Hennessy Capital
The main advantage of trading using opposite ESGEN Acquisition and Hennessy Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESGEN Acquisition position performs unexpectedly, Hennessy Capital 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 Capital will offset losses from the drop in Hennessy Capital's long position.| ESGEN Acquisition vs. WiMi Hologram Cloud | ESGEN Acquisition vs. Delek Drilling | ESGEN Acquisition vs. Seadrill Limited | ESGEN Acquisition vs. Freedom Internet Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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