Correlation Between Hennessy and Franklin North
Can any of the company-specific risk be diversified away by investing in both Hennessy and Franklin North 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 Franklin North 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 Franklin North Carolina, you can compare the effects of market volatilities on Hennessy and Franklin North 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 Franklin North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Franklin North.
Diversification Opportunities for Hennessy and Franklin North
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hennessy and Franklin is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Franklin North Carolina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin North Carolina 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 Franklin North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin North Carolina has no effect on the direction of Hennessy i.e., Hennessy and Franklin North go up and down completely randomly.
Pair Corralation between Hennessy and Franklin North
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 3.95 times more return on investment than Franklin North. However, Hennessy is 3.95 times more volatile than Franklin North Carolina. It trades about 0.33 of its potential returns per unit of risk. Franklin North Carolina is currently generating about 0.17 per unit of risk. If you would invest 2,608 in Hennessy Bp Energy on August 29, 2024 and sell it today you would earn a total of 247.00 from holding Hennessy Bp Energy or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Franklin North Carolina
Performance |
| Timeline |
| Hennessy Bp Energy |
| Franklin North Carolina |
Hennessy and Franklin North Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Franklin North
The main advantage of trading using opposite Hennessy and Franklin North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Franklin North 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 Franklin North will offset losses from the drop in Franklin North's long position.| Hennessy vs. HUMANA INC | Hennessy vs. Aquagold International | Hennessy vs. Barloworld Ltd ADR | Hennessy vs. Morningstar Unconstrained Allocation |
| Franklin North vs. Icon Natural Resources | Franklin North vs. Energy Services Fund | Franklin North vs. Hennessy Bp Energy | Franklin North vs. Alpsalerian Energy Infrastructure |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |