Correlation Between Payden Rygel and Hennessy
Can any of the company-specific risk be diversified away by investing in both Payden Rygel 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 Payden Rygel and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Rygel Investment and Hennessy Bp Energy, you can compare the effects of market volatilities on Payden Rygel 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 Payden Rygel with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Rygel and Hennessy.
Diversification Opportunities for Payden Rygel and Hennessy
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Payden and Hennessy is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Payden Rygel Investment 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 Payden Rygel 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 Payden Rygel Investment 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 Payden Rygel i.e., Payden Rygel and Hennessy go up and down completely randomly.
Pair Corralation between Payden Rygel and Hennessy
Assuming the 90 days horizon Payden Rygel is expected to generate 2.54 times less return on investment than Hennessy. But when comparing it to its historical volatility, Payden Rygel Investment is 2.92 times less risky than Hennessy. It trades about 0.04 of its potential returns per unit of risk. Hennessy Bp Energy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,360 in Hennessy Bp Energy on November 1, 2024 and sell it today you would earn a total of 445.00 from holding Hennessy Bp Energy or generate 18.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Rygel Investment vs. Hennessy Bp Energy
Performance |
| Timeline |
| Payden Rygel Investment |
| Hennessy Bp Energy |
Payden Rygel and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Rygel and Hennessy
The main advantage of trading using opposite Payden Rygel and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Rygel 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.| Payden Rygel vs. Financial Industries Fund | Payden Rygel vs. T Rowe Price | Payden Rygel vs. Angel Oak Financial | Payden Rygel vs. Prudential Financial Services |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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