Correlation Between Hennessy and Steward Small
Can any of the company-specific risk be diversified away by investing in both Hennessy and Steward Small 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 Steward Small 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 Steward Small Mid Cap, you can compare the effects of market volatilities on Hennessy and Steward Small 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 Steward Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Steward Small.
Diversification Opportunities for Hennessy and Steward Small
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hennessy and Steward is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Steward Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Small Mid 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 Steward Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Small Mid has no effect on the direction of Hennessy i.e., Hennessy and Steward Small go up and down completely randomly.
Pair Corralation between Hennessy and Steward Small
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 1.64 times more return on investment than Steward Small. However, Hennessy is 1.64 times more volatile than Steward Small Mid Cap. It trades about 0.05 of its potential returns per unit of risk. Steward Small Mid Cap is currently generating about 0.08 per unit of risk. If you would invest 2,398 in Hennessy Bp Energy on September 14, 2024 and sell it today you would earn a total of 394.00 from holding Hennessy Bp Energy or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 84.7% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Steward Small Mid Cap
Performance |
| Timeline |
| Hennessy Bp Energy |
| Steward Small Mid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hennessy and Steward Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Steward Small
The main advantage of trading using opposite Hennessy and Steward Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Steward Small 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 Steward Small will offset losses from the drop in Steward Small's long position.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Steward Small vs. Firsthand Alternative Energy | Steward Small vs. Oil Gas Ultrasector | Steward Small vs. Hennessy Bp Energy | Steward Small vs. Gamco Natural Resources |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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