Correlation Between Hennessy and Saat Moderate
Can any of the company-specific risk be diversified away by investing in both Hennessy and Saat Moderate 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 Saat Moderate 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 Saat Moderate Strategy, you can compare the effects of market volatilities on Hennessy and Saat Moderate 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 Saat Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Saat Moderate.
Diversification Opportunities for Hennessy and Saat Moderate
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hennessy and Saat is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Saat Moderate Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Moderate Strategy 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 Saat Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Moderate Strategy has no effect on the direction of Hennessy i.e., Hennessy and Saat Moderate go up and down completely randomly.
Pair Corralation between Hennessy and Saat Moderate
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 1.98 times more return on investment than Saat Moderate. However, Hennessy is 1.98 times more volatile than Saat Moderate Strategy. It trades about -0.03 of its potential returns per unit of risk. Saat Moderate Strategy is currently generating about -0.38 per unit of risk. If you would invest 2,756 in Hennessy Bp Energy on October 9, 2024 and sell it today you would lose (21.00) from holding Hennessy Bp Energy or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Saat Moderate Strategy
Performance |
| Timeline |
| Hennessy Bp Energy |
| Saat Moderate Strategy |
Hennessy and Saat Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Saat Moderate
The main advantage of trading using opposite Hennessy and Saat Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Saat Moderate 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 Saat Moderate will offset losses from the drop in Saat Moderate's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Saat Moderate vs. Alpine Ultra Short | Saat Moderate vs. Blrc Sgy Mnp | Saat Moderate vs. Pioneer Amt Free Municipal | Saat Moderate vs. Nuveen Strategic Municipal |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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