Correlation Between Henderson European and Via Renewables
Can any of the company-specific risk be diversified away by investing in both Henderson European and Via Renewables 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 Henderson European and Via Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson European Focus and Via Renewables, you can compare the effects of market volatilities on Henderson European and Via Renewables 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 Henderson European with a short position of Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson European and Via Renewables.
Diversification Opportunities for Henderson European and Via Renewables
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HENDERSON and Via is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Henderson European Focus and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables and Henderson European 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 Henderson European Focus are associated (or correlated) with Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Henderson European i.e., Henderson European and Via Renewables go up and down completely randomly.
Pair Corralation between Henderson European and Via Renewables
Assuming the 90 days horizon Henderson European Focus is expected to generate 1.1 times more return on investment than Via Renewables. However, Henderson European is 1.1 times more volatile than Via Renewables. It trades about 0.22 of its potential returns per unit of risk. Via Renewables is currently generating about -0.01 per unit of risk. If you would invest 4,525 in Henderson European Focus on November 28, 2024 and sell it today you would earn a total of 173.00 from holding Henderson European Focus or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson European Focus vs. Via Renewables
Performance |
| Timeline |
| Henderson European Focus |
| Via Renewables |
Henderson European and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson European and Via Renewables
The main advantage of trading using opposite Henderson European and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson European position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' long position.| Henderson European vs. Henderson European Focus | Henderson European vs. Invesco European Small | Henderson European vs. Henderson Global Equity | Henderson European vs. Oppenheimer Developing Markets |
| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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