Correlation Between Loomis Sayles and Hennessy
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles 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 Loomis Sayles and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loomis Sayles Strategic and Hennessy Bp Energy, you can compare the effects of market volatilities on Loomis Sayles 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 Loomis Sayles with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Hennessy.
Diversification Opportunities for Loomis Sayles and Hennessy
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Loomis and Hennessy is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Strategic 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 Loomis Sayles 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 Loomis Sayles Strategic 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 Loomis Sayles i.e., Loomis Sayles and Hennessy go up and down completely randomly.
Pair Corralation between Loomis Sayles and Hennessy
Assuming the 90 days horizon Loomis Sayles is expected to generate 1.04 times less return on investment than Hennessy. But when comparing it to its historical volatility, Loomis Sayles Strategic is 3.33 times less risky than Hennessy. It trades about 0.12 of its potential returns per unit of risk. Hennessy Bp Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,443 in Hennessy Bp Energy on September 12, 2024 and sell it today you would earn a total of 313.00 from holding Hennessy Bp Energy or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Strategic vs. Hennessy Bp Energy
Performance |
| Timeline |
| Loomis Sayles Strategic |
| Hennessy Bp Energy |
Loomis Sayles and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and Hennessy
The main advantage of trading using opposite Loomis Sayles and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles 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.| Loomis Sayles vs. Hennessy Bp Energy | Loomis Sayles vs. Franklin Natural Resources | Loomis Sayles vs. Icon Natural Resources | Loomis Sayles vs. Thrivent Natural Resources |
| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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