Correlation Between Hennessy Stance and Aquagold International
Can any of the company-specific risk be diversified away by investing in both Hennessy Stance and Aquagold International 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 Hennessy Stance and Aquagold International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Stance ESG and Aquagold International, you can compare the effects of market volatilities on Hennessy Stance and Aquagold International 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 Hennessy Stance with a short position of Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Stance and Aquagold International.
Diversification Opportunities for Hennessy Stance and Aquagold International
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hennessy and Aquagold is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Stance ESG and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and Hennessy Stance 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 Hennessy Stance ESG are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Hennessy Stance i.e., Hennessy Stance and Aquagold International go up and down completely randomly.
Pair Corralation between Hennessy Stance and Aquagold International
Given the investment horizon of 90 days Hennessy Stance ESG is expected to generate 0.07 times more return on investment than Aquagold International. However, Hennessy Stance ESG is 13.72 times less risky than Aquagold International. It trades about 0.06 of its potential returns per unit of risk. Aquagold International is currently generating about -0.21 per unit of risk. If you would invest 3,146 in Hennessy Stance ESG on November 28, 2024 and sell it today you would earn a total of 30.00 from holding Hennessy Stance ESG or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hennessy Stance ESG vs. Aquagold International
Performance |
| Timeline |
| Hennessy Stance ESG |
| Aquagold International |
Hennessy Stance and Aquagold International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Stance and Aquagold International
The main advantage of trading using opposite Hennessy Stance and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Stance position performs unexpectedly, Aquagold International 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 Aquagold International will offset losses from the drop in Aquagold International's long position.| Hennessy Stance vs. iShares ESG Screened | Hennessy Stance vs. Innovator Equity Accelerated | Hennessy Stance vs. iShares ESG Screened | Hennessy Stance vs. Innovator Equity Accelerated |
| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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