Correlation Between Hennessy and Delaware Extended
Can any of the company-specific risk be diversified away by investing in both Hennessy and Delaware Extended 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 Delaware Extended 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 Delaware Extended Duration, you can compare the effects of market volatilities on Hennessy and Delaware Extended 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 Delaware Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Delaware Extended.
Diversification Opportunities for Hennessy and Delaware Extended
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hennessy and Delaware is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Delaware Extended Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Extended 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 Delaware Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Extended has no effect on the direction of Hennessy i.e., Hennessy and Delaware Extended go up and down completely randomly.
Pair Corralation between Hennessy and Delaware Extended
Assuming the 90 days horizon Hennessy Bp Energy is expected to under-perform the Delaware Extended. In addition to that, Hennessy is 1.56 times more volatile than Delaware Extended Duration. It trades about -0.05 of its total potential returns per unit of risk. Delaware Extended Duration is currently generating about 0.09 per unit of volatility. If you would invest 1,435 in Delaware Extended Duration on September 13, 2024 and sell it today you would earn a total of 17.00 from holding Delaware Extended Duration or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Delaware Extended Duration
Performance |
| Timeline |
| Hennessy Bp Energy |
| Delaware Extended |
Hennessy and Delaware Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Delaware Extended
The main advantage of trading using opposite Hennessy and Delaware Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Delaware Extended 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 Delaware Extended will offset losses from the drop in Delaware Extended's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class | Hennessy vs. Fidelity Advisor Energy |
| Delaware Extended vs. California High Yield Municipal | Delaware Extended vs. Alliancebernstein Global High | Delaware Extended vs. Franklin High Income | Delaware Extended vs. Artisan High Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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