Correlation Between Hennessy and George Putnam
Can any of the company-specific risk be diversified away by investing in both Hennessy and George Putnam 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 George Putnam 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 George Putnam Fund, you can compare the effects of market volatilities on Hennessy and George Putnam 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 George Putnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and George Putnam.
Diversification Opportunities for Hennessy and George Putnam
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hennessy and George is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and George Putnam Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Putnam 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 George Putnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Putnam has no effect on the direction of Hennessy i.e., Hennessy and George Putnam go up and down completely randomly.
Pair Corralation between Hennessy and George Putnam
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 1.25 times more return on investment than George Putnam. However, Hennessy is 1.25 times more volatile than George Putnam Fund. It trades about -0.07 of its potential returns per unit of risk. George Putnam Fund is currently generating about -0.16 per unit of risk. If you would invest 2,799 in Hennessy Bp Energy on September 12, 2024 and sell it today you would lose (43.00) from holding Hennessy Bp Energy or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. George Putnam Fund
Performance |
| Timeline |
| Hennessy Bp Energy |
| George Putnam |
Hennessy and George Putnam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and George Putnam
The main advantage of trading using opposite Hennessy and George Putnam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, George Putnam 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 George Putnam will offset losses from the drop in George Putnam's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| George Putnam vs. Morningstar Defensive Bond | George Putnam vs. Dws Government Money | George Putnam vs. Ambrus Core Bond | George Putnam vs. Touchstone Premium Yield |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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