Correlation Between Guinness Atkinson and Hennessy
Can any of the company-specific risk be diversified away by investing in both Guinness Atkinson 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 Guinness Atkinson and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guinness Atkinson Alternative and Hennessy Bp Energy, you can compare the effects of market volatilities on Guinness Atkinson 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 Guinness Atkinson with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guinness Atkinson and Hennessy.
Diversification Opportunities for Guinness Atkinson and Hennessy
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guinness and Hennessy is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Guinness Atkinson Alternative 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 Guinness Atkinson 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 Guinness Atkinson Alternative 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 Guinness Atkinson i.e., Guinness Atkinson and Hennessy go up and down completely randomly.
Pair Corralation between Guinness Atkinson and Hennessy
Assuming the 90 days horizon Guinness Atkinson Alternative is expected to under-perform the Hennessy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guinness Atkinson Alternative is 1.15 times less risky than Hennessy. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Hennessy Bp Energy is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,588 in Hennessy Bp Energy on September 1, 2024 and sell it today you would earn a total of 271.00 from holding Hennessy Bp Energy or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guinness Atkinson Alternative vs. Hennessy Bp Energy
Performance |
| Timeline |
| Guinness Atkinson |
| Hennessy Bp Energy |
Guinness Atkinson and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guinness Atkinson and Hennessy
The main advantage of trading using opposite Guinness Atkinson and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guinness Atkinson 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.| Guinness Atkinson vs. New Alternatives Fund | Guinness Atkinson vs. Calvert Global Energy | Guinness Atkinson vs. Firsthand Alternative Energy | Guinness Atkinson vs. Guinness Atkinson Global |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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