Correlation Between Hennessy and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Hennessy and Putnam 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 Putnam 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 Putnam Global Financials, you can compare the effects of market volatilities on Hennessy and Putnam 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 Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Putnam Global.
Diversification Opportunities for Hennessy and Putnam Global
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hennessy and Putnam is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Putnam Global Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Financials 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 Putnam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Global Financials has no effect on the direction of Hennessy i.e., Hennessy and Putnam Global go up and down completely randomly.
Pair Corralation between Hennessy and Putnam Global
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 1.91 times more return on investment than Putnam Global. However, Hennessy is 1.91 times more volatile than Putnam Global Financials. It trades about 0.24 of its potential returns per unit of risk. Putnam Global Financials is currently generating about 0.2 per unit of risk. If you would invest 2,691 in Hennessy Bp Energy on November 1, 2024 and sell it today you would earn a total of 114.00 from holding Hennessy Bp Energy or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Putnam Global Financials
Performance |
| Timeline |
| Hennessy Bp Energy |
| Putnam Global Financials |
Hennessy and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Putnam Global
The main advantage of trading using opposite Hennessy and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Putnam 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 Putnam Global will offset losses from the drop in Putnam 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 |
| Putnam Global vs. Goldman Sachs Mlp | Putnam Global vs. Energy Services Fund | Putnam Global vs. Alpsalerian Energy Infrastructure | Putnam Global vs. Hennessy Bp Energy |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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