Correlation Between Pimco Unconstrained and Hennessy
Can any of the company-specific risk be diversified away by investing in both Pimco Unconstrained 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 Pimco Unconstrained and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Unconstrained Bond and Hennessy Bp Energy, you can compare the effects of market volatilities on Pimco Unconstrained 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 Pimco Unconstrained with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Unconstrained and Hennessy.
Diversification Opportunities for Pimco Unconstrained and Hennessy
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and Hennessy is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Unconstrained Bond 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 Pimco Unconstrained 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 Pimco Unconstrained Bond 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 Pimco Unconstrained i.e., Pimco Unconstrained and Hennessy go up and down completely randomly.
Pair Corralation between Pimco Unconstrained and Hennessy
Assuming the 90 days horizon Pimco Unconstrained is expected to generate 2.55 times less return on investment than Hennessy. But when comparing it to its historical volatility, Pimco Unconstrained Bond is 7.99 times less risky than Hennessy. It trades about 0.22 of its potential returns per unit of risk. Hennessy Bp Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,389 in Hennessy Bp Energy on August 26, 2024 and sell it today you would earn a total of 495.00 from holding Hennessy Bp Energy or generate 20.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Unconstrained Bond vs. Hennessy Bp Energy
Performance |
| Timeline |
| Pimco Unconstrained Bond |
| Hennessy Bp Energy |
Pimco Unconstrained and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Unconstrained and Hennessy
The main advantage of trading using opposite Pimco Unconstrained and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Unconstrained 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.| Pimco Unconstrained vs. Hennessy Bp Energy | Pimco Unconstrained vs. Calvert Global Energy | Pimco Unconstrained vs. Fidelity Advisor Energy | Pimco Unconstrained vs. Alpsalerian Energy Infrastructure |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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