Correlation Between Pinnacle Sherman and Energy Services
Can any of the company-specific risk be diversified away by investing in both Pinnacle Sherman and Energy Services 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 Pinnacle Sherman and Energy Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Sherman Multi Strategy and Energy Services Fund, you can compare the effects of market volatilities on Pinnacle Sherman and Energy Services 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 Pinnacle Sherman with a short position of Energy Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Sherman and Energy Services.
Diversification Opportunities for Pinnacle Sherman and Energy Services
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pinnacle and ENERGY is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Sherman Multi Strateg and Energy Services Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Services and Pinnacle Sherman 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 Pinnacle Sherman Multi Strategy are associated (or correlated) with Energy Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Services has no effect on the direction of Pinnacle Sherman i.e., Pinnacle Sherman and Energy Services go up and down completely randomly.
Pair Corralation between Pinnacle Sherman and Energy Services
Assuming the 90 days horizon Pinnacle Sherman Multi Strategy is expected to generate 0.44 times more return on investment than Energy Services. However, Pinnacle Sherman Multi Strategy is 2.28 times less risky than Energy Services. It trades about 0.08 of its potential returns per unit of risk. Energy Services Fund is currently generating about 0.02 per unit of risk. If you would invest 1,060 in Pinnacle Sherman Multi Strategy on September 2, 2024 and sell it today you would earn a total of 409.00 from holding Pinnacle Sherman Multi Strategy or generate 38.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Sherman Multi Strateg vs. Energy Services Fund
Performance |
| Timeline |
| Pinnacle Sherman Multi |
| Energy Services |
Pinnacle Sherman and Energy Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Sherman and Energy Services
The main advantage of trading using opposite Pinnacle Sherman and Energy Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Sherman position performs unexpectedly, Energy Services 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 Energy Services will offset losses from the drop in Energy Services' long position.| Pinnacle Sherman vs. Energy Services Fund | Pinnacle Sherman vs. Ivy Energy Fund | Pinnacle Sherman vs. Hennessy Bp Energy | Pinnacle Sherman vs. Calvert Global Energy |
| Energy Services vs. Basic Materials Fund | Energy Services vs. Electronics Fund Investor | Energy Services vs. Health Care Fund | Energy Services vs. Precious Metals Fund |
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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