Correlation Between Hennessy and Madison Diversified
Can any of the company-specific risk be diversified away by investing in both Hennessy and Madison Diversified 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 Madison Diversified 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 Madison Diversified Income, you can compare the effects of market volatilities on Hennessy and Madison Diversified 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 Madison Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Madison Diversified.
Diversification Opportunities for Hennessy and Madison Diversified
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hennessy and Madison is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Madison Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Diversified 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 Madison Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Diversified has no effect on the direction of Hennessy i.e., Hennessy and Madison Diversified go up and down completely randomly.
Pair Corralation between Hennessy and Madison Diversified
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 3.89 times more return on investment than Madison Diversified. However, Hennessy is 3.89 times more volatile than Madison Diversified Income. It trades about 0.13 of its potential returns per unit of risk. Madison Diversified Income is currently generating about -0.01 per unit of risk. If you would invest 2,565 in Hennessy Bp Energy on October 18, 2024 and sell it today you would earn a total of 333.00 from holding Hennessy Bp Energy or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Madison Diversified Income
Performance |
| Timeline |
| Hennessy Bp Energy |
| Madison Diversified |
Hennessy and Madison Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Madison Diversified
The main advantage of trading using opposite Hennessy and Madison Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Madison Diversified 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 Madison Diversified will offset losses from the drop in Madison Diversified's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Madison Diversified vs. Transamerica Mlp Energy | Madison Diversified vs. Thrivent Natural Resources | Madison Diversified vs. Hennessy Bp Energy | Madison Diversified vs. Adams Natural Resources |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |