Correlation Between Hennessy and Dunham Large
Can any of the company-specific risk be diversified away by investing in both Hennessy and Dunham Large 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 Dunham Large 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 Dunham Large Cap, you can compare the effects of market volatilities on Hennessy and Dunham Large 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 Dunham Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Dunham Large.
Diversification Opportunities for Hennessy and Dunham Large
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hennessy and Dunham is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Dunham Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Large Cap 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 Dunham Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Large Cap has no effect on the direction of Hennessy i.e., Hennessy and Dunham Large go up and down completely randomly.
Pair Corralation between Hennessy and Dunham Large
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 1.87 times more return on investment than Dunham Large. However, Hennessy is 1.87 times more volatile than Dunham Large Cap. It trades about 0.17 of its potential returns per unit of risk. Dunham Large Cap is currently generating about 0.19 per unit of risk. If you would invest 2,550 in Hennessy Bp Energy on September 4, 2024 and sell it today you would earn a total of 322.00 from holding Hennessy Bp Energy or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Dunham Large Cap
Performance |
| Timeline |
| Hennessy Bp Energy |
| Dunham Large Cap |
Hennessy and Dunham Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Dunham Large
The main advantage of trading using opposite Hennessy and Dunham Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Dunham Large 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 Dunham Large will offset losses from the drop in Dunham Large's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Dunham Large vs. Energy Basic Materials | Dunham Large vs. Jennison Natural Resources | Dunham Large vs. Clearbridge Energy Mlp | Dunham Large vs. Hennessy Bp Energy |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |