Correlation Between Virtus Select and Hennessy
Can any of the company-specific risk be diversified away by investing in both Virtus Select 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 Virtus Select and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Select Mlp and Hennessy Bp Energy, you can compare the effects of market volatilities on Virtus Select 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 Virtus Select with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Select and Hennessy.
Diversification Opportunities for Virtus Select and Hennessy
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Hennessy is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Select Mlp 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 Virtus Select 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 Virtus Select Mlp 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 Virtus Select i.e., Virtus Select and Hennessy go up and down completely randomly.
Pair Corralation between Virtus Select and Hennessy
Assuming the 90 days horizon Virtus Select is expected to generate 1.3 times less return on investment than Hennessy. In addition to that, Virtus Select is 1.33 times more volatile than Hennessy Bp Energy. It trades about 0.33 of its total potential returns per unit of risk. Hennessy Bp Energy is currently generating about 0.57 per unit of volatility. If you would invest 2,645 in Hennessy Bp Energy on October 25, 2024 and sell it today you would earn a total of 225.00 from holding Hennessy Bp Energy or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Select Mlp vs. Hennessy Bp Energy
Performance |
| Timeline |
| Virtus Select Mlp |
| Hennessy Bp Energy |
Virtus Select and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Select and Hennessy
The main advantage of trading using opposite Virtus Select and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Select 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.| Virtus Select vs. Tortoise Mlp Pipeline | Virtus Select vs. Oppenheimer Steelpath Mlp | Virtus Select vs. Oppenheimer Steelpath Mlp | Virtus Select vs. Oppenheimer Steelpath Mlp |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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