Correlation Between Hennessy and Oakmark Global
Can any of the company-specific risk be diversified away by investing in both Hennessy and Oakmark Global 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 Oakmark Global 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 Oakmark Global Select, you can compare the effects of market volatilities on Hennessy and Oakmark Global 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 Oakmark Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Oakmark Global.
Diversification Opportunities for Hennessy and Oakmark Global
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hennessy and Oakmark is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Oakmark Global Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Global Select 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 Oakmark Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Global Select has no effect on the direction of Hennessy i.e., Hennessy and Oakmark Global go up and down completely randomly.
Pair Corralation between Hennessy and Oakmark Global
Assuming the 90 days horizon Hennessy is expected to generate 1.19 times less return on investment than Oakmark Global. In addition to that, Hennessy is 1.7 times more volatile than Oakmark Global Select. It trades about 0.04 of its total potential returns per unit of risk. Oakmark Global Select is currently generating about 0.08 per unit of volatility. If you would invest 1,726 in Oakmark Global Select on September 12, 2024 and sell it today you would earn a total of 573.00 from holding Oakmark Global Select or generate 33.2% 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. Oakmark Global Select
Performance |
| Timeline |
| Hennessy Bp Energy |
| Oakmark Global Select |
Hennessy and Oakmark Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Oakmark Global
The main advantage of trading using opposite Hennessy and Oakmark Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Oakmark Global 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 Oakmark Global will offset losses from the drop in Oakmark Global's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Oakmark Global vs. Franklin Federal Limited Term | Oakmark Global vs. Boston Partners Longshort | Oakmark Global vs. Lord Abbett Short | Oakmark Global vs. Rbc Short Duration |
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 CEOs Directory module to screen CEOs from public companies around the world.
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