Correlation Between Hennessy and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Hennessy and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Absolute, you can compare the effects of market volatilities on Hennessy and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Goldman Sachs.
Diversification Opportunities for Hennessy and Goldman Sachs
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hennessy and Goldman is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Goldman Sachs Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Absolute 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Absolute has no effect on the direction of Hennessy i.e., Hennessy and Goldman Sachs go up and down completely randomly.
Pair Corralation between Hennessy and Goldman Sachs
Assuming the 90 days horizon Hennessy Bp Energy is expected to under-perform the Goldman Sachs. In addition to that, Hennessy is 3.28 times more volatile than Goldman Sachs Absolute. It trades about -0.07 of its total potential returns per unit of risk. Goldman Sachs Absolute is currently generating about 0.11 per unit of volatility. If you would invest 1,017 in Goldman Sachs Absolute on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Goldman Sachs Absolute or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Goldman Sachs Absolute
Performance |
| Timeline |
| Hennessy Bp Energy |
| Goldman Sachs Absolute |
Hennessy and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Goldman Sachs
The main advantage of trading using opposite Hennessy and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Goldman Sachs vs. Tortoise Energy Independence | Goldman Sachs vs. Adams Natural Resources | Goldman Sachs vs. Hennessy Bp Energy | Goldman Sachs vs. Clearbridge Energy Mlp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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