Correlation Between Hennessy Gas and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Hennessy Gas and Fidelity Advisor 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 Hennessy Gas and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Gas Utility and Fidelity Advisor Utilities, you can compare the effects of market volatilities on Hennessy Gas and Fidelity Advisor 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 Hennessy Gas with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Gas and Fidelity Advisor.
Diversification Opportunities for Hennessy Gas and Fidelity Advisor
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hennessy and Fidelity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Gas Utility and Fidelity Advisor Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Uti and Hennessy Gas 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 Hennessy Gas Utility are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Uti has no effect on the direction of Hennessy Gas i.e., Hennessy Gas and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Hennessy Gas and Fidelity Advisor
Assuming the 90 days horizon Hennessy Gas is expected to generate 1.9 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Hennessy Gas Utility is 1.18 times less risky than Fidelity Advisor. It trades about 0.05 of its potential returns per unit of risk. Fidelity Advisor Utilities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,616 in Fidelity Advisor Utilities on September 12, 2024 and sell it today you would earn a total of 1,052 from holding Fidelity Advisor Utilities or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Gas Utility vs. Fidelity Advisor Utilities
Performance |
| Timeline |
| Hennessy Gas Utility |
| Fidelity Advisor Uti |
Hennessy Gas and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Gas and Fidelity Advisor
The main advantage of trading using opposite Hennessy Gas and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Gas position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Hennessy Gas vs. Utilities Fund Investor | Hennessy Gas vs. Amg Yacktman Focused | Hennessy Gas vs. Chemicals Portfolio Chemicals | Hennessy Gas vs. Invesco Energy Fund |
| Fidelity Advisor vs. Alpine Dynamic Dividend | Fidelity Advisor vs. The Gabelli Utilities | Fidelity Advisor vs. The Gabelli Equity | Fidelity Advisor vs. Hennessy Gas Utility |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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