Correlation Between Hennessy and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Hennessy and Angel Oak 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 and Angel Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Bp Midstream and Angel Oak Multi Strategy, you can compare the effects of market volatilities on Hennessy and Angel Oak 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 with a short position of Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Angel Oak.
Diversification Opportunities for Hennessy and Angel Oak
Excellent diversification
The 3 months correlation between Hennessy and Angel is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Midstream and Angel Oak Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Multi and Hennessy 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 Bp Midstream are associated (or correlated) with Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Multi has no effect on the direction of Hennessy i.e., Hennessy and Angel Oak go up and down completely randomly.
Pair Corralation between Hennessy and Angel Oak
Assuming the 90 days horizon Hennessy Bp Midstream is expected to generate 4.55 times more return on investment than Angel Oak. However, Hennessy is 4.55 times more volatile than Angel Oak Multi Strategy. It trades about 0.14 of its potential returns per unit of risk. Angel Oak Multi Strategy is currently generating about 0.11 per unit of risk. If you would invest 797.00 in Hennessy Bp Midstream on September 2, 2024 and sell it today you would earn a total of 646.00 from holding Hennessy Bp Midstream or generate 81.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Midstream vs. Angel Oak Multi Strategy
Performance |
| Timeline |
| Hennessy Bp Midstream |
| Angel Oak Multi |
Hennessy and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Angel Oak
The main advantage of trading using opposite Hennessy and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Hennessy vs. Angel Oak Multi Strategy | Hennessy vs. Franklin Emerging Market | Hennessy vs. Siit Emerging Markets | Hennessy vs. Barings Emerging Markets |
| Angel Oak vs. Calvert Developed Market | Angel Oak vs. Origin Emerging Markets | Angel Oak vs. Aqr Sustainable Long Short | Angel Oak vs. Vanguard Developed Markets |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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