Correlation Between Hennessy and Virtus Bond
Can any of the company-specific risk be diversified away by investing in both Hennessy and Virtus Bond 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 Virtus Bond 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 Virtus Bond Fund, you can compare the effects of market volatilities on Hennessy and Virtus Bond 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 Virtus Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Virtus Bond.
Diversification Opportunities for Hennessy and Virtus Bond
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hennessy and Virtus is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Virtus Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Bond Fund 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 Virtus Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Bond Fund has no effect on the direction of Hennessy i.e., Hennessy and Virtus Bond go up and down completely randomly.
Pair Corralation between Hennessy and Virtus Bond
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 3.87 times more return on investment than Virtus Bond. However, Hennessy is 3.87 times more volatile than Virtus Bond Fund. It trades about 0.05 of its potential returns per unit of risk. Virtus Bond Fund is currently generating about 0.06 per unit of risk. If you would invest 2,131 in Hennessy Bp Energy on December 1, 2024 and sell it today you would earn a total of 660.00 from holding Hennessy Bp Energy or generate 30.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Virtus Bond Fund
Performance |
| Timeline |
| Hennessy Bp Energy |
| Virtus Bond Fund |
Hennessy and Virtus Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Virtus Bond
The main advantage of trading using opposite Hennessy and Virtus Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Virtus Bond 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 Virtus Bond will offset losses from the drop in Virtus Bond's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Virtus Bond vs. Target Retirement 2040 | Virtus Bond vs. Tiaa Cref Lifestyle Moderate | Virtus Bond vs. Jp Morgan Smartretirement | Virtus Bond vs. Blackrock Retirement 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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