Correlation Between Hennessy Nerstone and Aig Government
Can any of the company-specific risk be diversified away by investing in both Hennessy Nerstone and Aig Government 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 Nerstone and Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Nerstone Large and Aig Government Money, you can compare the effects of market volatilities on Hennessy Nerstone and Aig Government 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 Nerstone with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Nerstone and Aig Government.
Diversification Opportunities for Hennessy Nerstone and Aig Government
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hennessy and Aig is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Nerstone Large and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money and Hennessy Nerstone 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 Nerstone Large are associated (or correlated) with Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Hennessy Nerstone i.e., Hennessy Nerstone and Aig Government go up and down completely randomly.
Pair Corralation between Hennessy Nerstone and Aig Government
Assuming the 90 days horizon Hennessy Nerstone Large is expected to generate 5.04 times more return on investment than Aig Government. However, Hennessy Nerstone is 5.04 times more volatile than Aig Government Money. It trades about 0.06 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.05 per unit of risk. If you would invest 954.00 in Hennessy Nerstone Large on September 12, 2024 and sell it today you would earn a total of 260.00 from holding Hennessy Nerstone Large or generate 27.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Nerstone Large vs. Aig Government Money
Performance |
| Timeline |
| Hennessy Nerstone Large |
| Aig Government Money |
Hennessy Nerstone and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Nerstone and Aig Government
The main advantage of trading using opposite Hennessy Nerstone and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Nerstone position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Hennessy Nerstone vs. The National Tax Free | Hennessy Nerstone vs. Western Asset Municipal | Hennessy Nerstone vs. Alliancebernstein National Municipal | Hennessy Nerstone vs. Pace High Yield |
| Aig Government vs. SCOR PK | Aig Government vs. Morningstar Unconstrained Allocation | Aig Government vs. Via Renewables | Aig Government vs. Bondbloxx ETF Trust |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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