Correlation Between Hennessy and Baron Focused
Can any of the company-specific risk be diversified away by investing in both Hennessy and Baron Focused 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 Baron Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Bp Energy and Baron Focused Growth, you can compare the effects of market volatilities on Hennessy and Baron Focused 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 Baron Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Baron Focused.
Diversification Opportunities for Hennessy and Baron Focused
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hennessy and Baron is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Baron Focused Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Focused Growth 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 Energy are associated (or correlated) with Baron Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Focused Growth has no effect on the direction of Hennessy i.e., Hennessy and Baron Focused go up and down completely randomly.
Pair Corralation between Hennessy and Baron Focused
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 1.11 times more return on investment than Baron Focused. However, Hennessy is 1.11 times more volatile than Baron Focused Growth. It trades about 0.37 of its potential returns per unit of risk. Baron Focused Growth is currently generating about 0.32 per unit of risk. If you would invest 2,608 in Hennessy Bp Energy on August 29, 2024 and sell it today you would earn a total of 286.00 from holding Hennessy Bp Energy or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Baron Focused Growth
Performance |
| Timeline |
| Hennessy Bp Energy |
| Baron Focused Growth |
Hennessy and Baron Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Baron Focused
The main advantage of trading using opposite Hennessy and Baron Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Baron Focused 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 Baron Focused will offset losses from the drop in Baron Focused's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Baron Focused vs. Baron Real Estate | Baron Focused vs. Baron Real Estate | Baron Focused vs. Baron Real Estate | Baron Focused vs. Baron Small Cap |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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