Correlation Between Hennessy and Fidelity Stock
Can any of the company-specific risk be diversified away by investing in both Hennessy and Fidelity Stock 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 Stock 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 Stock Selector, you can compare the effects of market volatilities on Hennessy and Fidelity Stock 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 Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Fidelity Stock.
Diversification Opportunities for Hennessy and Fidelity Stock
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hennessy and FIDELITY is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Fidelity Stock Selector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Stock Selector 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 Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Stock Selector has no effect on the direction of Hennessy i.e., Hennessy and Fidelity Stock go up and down completely randomly.
Pair Corralation between Hennessy and Fidelity Stock
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 1.75 times more return on investment than Fidelity Stock. However, Hennessy is 1.75 times more volatile than Fidelity Stock Selector. It trades about 0.07 of its potential returns per unit of risk. Fidelity Stock Selector is currently generating about 0.11 per unit of risk. If you would invest 2,132 in Hennessy Bp Energy on September 2, 2024 and sell it today you would earn a total of 740.00 from holding Hennessy Bp Energy or generate 34.71% 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 Stock Selector
Performance |
| Timeline |
| Hennessy Bp Energy |
| Fidelity Stock Selector |
Hennessy and Fidelity Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Fidelity Stock
The main advantage of trading using opposite Hennessy and Fidelity Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Fidelity Stock 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 Stock will offset losses from the drop in Fidelity Stock'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 Stock vs. Angel Oak Financial | Fidelity Stock vs. Blackrock Financial Institutions | Fidelity Stock vs. Davis Financial Fund | Fidelity Stock vs. Davis Financial 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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