Correlation Between Mainstay Growth and Hennessy
Can any of the company-specific risk be diversified away by investing in both Mainstay Growth and Hennessy 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 Mainstay Growth and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Growth Etf and Hennessy Bp Energy, you can compare the effects of market volatilities on Mainstay Growth and Hennessy 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 Mainstay Growth with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Growth and Hennessy.
Diversification Opportunities for Mainstay Growth and Hennessy
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mainstay and Hennessy is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Growth Etf and Hennessy Bp Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Bp Energy and Mainstay Growth 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 Mainstay Growth Etf are associated (or correlated) with Hennessy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Bp Energy has no effect on the direction of Mainstay Growth i.e., Mainstay Growth and Hennessy go up and down completely randomly.
Pair Corralation between Mainstay Growth and Hennessy
Assuming the 90 days horizon Mainstay Growth Etf is expected to generate 0.43 times more return on investment than Hennessy. However, Mainstay Growth Etf is 2.32 times less risky than Hennessy. It trades about 0.09 of its potential returns per unit of risk. Hennessy Bp Energy is currently generating about -0.05 per unit of risk. If you would invest 1,489 in Mainstay Growth Etf on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Mainstay Growth Etf or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstay Growth Etf vs. Hennessy Bp Energy
Performance |
| Timeline |
| Mainstay Growth Etf |
| Hennessy Bp Energy |
Mainstay Growth and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Growth and Hennessy
The main advantage of trading using opposite Mainstay Growth and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Growth position performs unexpectedly, Hennessy 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 Hennessy will offset losses from the drop in Hennessy's long position.| Mainstay Growth vs. Shelton Emerging Markets | Mainstay Growth vs. Black Oak Emerging | Mainstay Growth vs. Vy Jpmorgan Emerging | Mainstay Growth vs. Pnc Emerging Markets |
| Hennessy vs. World Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class | Hennessy vs. Fidelity Advisor Energy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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