Correlation Between Hennessy and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Hennessy and Baillie Gifford 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 Baillie Gifford 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 Baillie Gifford International, you can compare the effects of market volatilities on Hennessy and Baillie Gifford 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 Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Baillie Gifford.
Diversification Opportunities for Hennessy and Baillie Gifford
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hennessy and Baillie is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Baillie Gifford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Inte 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 Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Inte has no effect on the direction of Hennessy i.e., Hennessy and Baillie Gifford go up and down completely randomly.
Pair Corralation between Hennessy and Baillie Gifford
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 0.93 times more return on investment than Baillie Gifford. However, Hennessy Bp Energy is 1.07 times less risky than Baillie Gifford. It trades about 0.14 of its potential returns per unit of risk. Baillie Gifford International is currently generating about 0.07 per unit of risk. If you would invest 2,559 in Hennessy Bp Energy on November 1, 2024 and sell it today you would earn a total of 258.00 from holding Hennessy Bp Energy or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Baillie Gifford International
Performance |
| Timeline |
| Hennessy Bp Energy |
| Baillie Gifford Inte |
Hennessy and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Baillie Gifford
The main advantage of trading using opposite Hennessy and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Baillie Gifford vs. Fidelity Advisor Energy | Baillie Gifford vs. Goldman Sachs Mlp | Baillie Gifford vs. Hennessy Bp Energy | Baillie Gifford vs. Energy Services Fund |
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 Stocks Directory module to find actively traded stocks across global markets.
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