Correlation Between Hennessy and Nexpoint Real
Can any of the company-specific risk be diversified away by investing in both Hennessy and Nexpoint Real 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 Nexpoint Real 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 Nexpoint Real Estate, you can compare the effects of market volatilities on Hennessy and Nexpoint Real 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 Nexpoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Nexpoint Real.
Diversification Opportunities for Hennessy and Nexpoint Real
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hennessy and NexPoint is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Nexpoint Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexpoint Real Estate 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 Nexpoint Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexpoint Real Estate has no effect on the direction of Hennessy i.e., Hennessy and Nexpoint Real go up and down completely randomly.
Pair Corralation between Hennessy and Nexpoint Real
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 3.15 times more return on investment than Nexpoint Real. However, Hennessy is 3.15 times more volatile than Nexpoint Real Estate. It trades about 0.13 of its potential returns per unit of risk. Nexpoint Real Estate is currently generating about -0.04 per unit of risk. If you would invest 2,768 in Hennessy Bp Energy on November 8, 2024 and sell it today you would earn a total of 76.00 from holding Hennessy Bp Energy or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Nexpoint Real Estate
Performance |
| Timeline |
| Hennessy Bp Energy |
| Nexpoint Real Estate |
Hennessy and Nexpoint Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Nexpoint Real
The main advantage of trading using opposite Hennessy and Nexpoint Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Nexpoint Real 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 Nexpoint Real will offset losses from the drop in Nexpoint Real's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Nexpoint Real vs. Diversified Income Fund | Nexpoint Real vs. Guggenheim Diversified Income | Nexpoint Real vs. Aqr Diversified Arbitrage | Nexpoint Real vs. Wilmington Diversified Income |
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.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |