Correlation Between Hennessy Capital and Golden Arrow
Can any of the company-specific risk be diversified away by investing in both Hennessy Capital and Golden Arrow 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 Capital and Golden Arrow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Capital Investment and Golden Arrow Merger, you can compare the effects of market volatilities on Hennessy Capital and Golden Arrow 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 Capital with a short position of Golden Arrow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Capital and Golden Arrow.
Diversification Opportunities for Hennessy Capital and Golden Arrow
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hennessy and Golden is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Capital Investment and Golden Arrow Merger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Arrow Merger and Hennessy Capital 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 Capital Investment are associated (or correlated) with Golden Arrow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Arrow Merger has no effect on the direction of Hennessy Capital i.e., Hennessy Capital and Golden Arrow go up and down completely randomly.
Pair Corralation between Hennessy Capital and Golden Arrow
If you would invest 10.00 in Hennessy Capital Investment on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Hennessy Capital Investment or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 11.11% |
| Values | Daily Returns |
Hennessy Capital Investment vs. Golden Arrow Merger
Performance |
| Timeline |
| Hennessy Capital Inv |
| Golden Arrow Merger |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hennessy Capital and Golden Arrow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Capital and Golden Arrow
The main advantage of trading using opposite Hennessy Capital and Golden Arrow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Capital position performs unexpectedly, Golden Arrow 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 Golden Arrow will offset losses from the drop in Golden Arrow's long position.| Hennessy Capital vs. Aurora Innovation | Hennessy Capital vs. HUMANA INC | Hennessy Capital vs. Aquagold International | Hennessy Capital vs. Barloworld Ltd ADR |
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 CEOs Directory module to screen CEOs from public companies around the world.
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