Correlation Between Hennessy and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Hennessy and Fidelity Advisor 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 Fidelity Advisor 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 Fidelity Advisor Financial, you can compare the effects of market volatilities on Hennessy and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Fidelity Advisor.
Diversification Opportunities for Hennessy and Fidelity Advisor
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hennessy and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Fidelity Advisor Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Fin 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Fin has no effect on the direction of Hennessy i.e., Hennessy and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Hennessy and Fidelity Advisor
Assuming the 90 days horizon Hennessy is expected to generate 1.07 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Hennessy Bp Energy is 1.45 times less risky than Fidelity Advisor. It trades about 0.38 of its potential returns per unit of risk. Fidelity Advisor Financial is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,634 in Fidelity Advisor Financial on September 1, 2024 and sell it today you would earn a total of 402.00 from holding Fidelity Advisor Financial or generate 11.06% 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. Fidelity Advisor Financial
Performance |
| Timeline |
| Hennessy Bp Energy |
| Fidelity Advisor Fin |
Hennessy and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Fidelity Advisor
The main advantage of trading using opposite Hennessy and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Fidelity Advisor vs. Goehring Rozencwajg Resources | Fidelity Advisor vs. Clearbridge Energy Mlp | Fidelity Advisor vs. Fidelity Advisor Energy | Fidelity Advisor 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |