Correlation Between Hennessy and Eventide Limited-term
Can any of the company-specific risk be diversified away by investing in both Hennessy and Eventide Limited-term 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 Eventide Limited-term 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 Eventide Limited Term Bond, you can compare the effects of market volatilities on Hennessy and Eventide Limited-term 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 Eventide Limited-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Eventide Limited-term.
Diversification Opportunities for Hennessy and Eventide Limited-term
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hennessy and Eventide is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Eventide Limited Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Limited Term 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 Eventide Limited-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Limited Term has no effect on the direction of Hennessy i.e., Hennessy and Eventide Limited-term go up and down completely randomly.
Pair Corralation between Hennessy and Eventide Limited-term
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 7.96 times more return on investment than Eventide Limited-term. However, Hennessy is 7.96 times more volatile than Eventide Limited Term Bond. It trades about 0.07 of its potential returns per unit of risk. Eventide Limited Term Bond is currently generating about 0.13 per unit of risk. If you would invest 2,178 in Hennessy Bp Energy on August 31, 2024 and sell it today you would earn a total of 681.00 from holding Hennessy Bp Energy or generate 31.27% 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. Eventide Limited Term Bond
Performance |
| Timeline |
| Hennessy Bp Energy |
| Eventide Limited Term |
Hennessy and Eventide Limited-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Eventide Limited-term
The main advantage of trading using opposite Hennessy and Eventide Limited-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Eventide Limited-term 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 Eventide Limited-term will offset losses from the drop in Eventide Limited-term's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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