Correlation Between Gamco Natural and Hennessy
Can any of the company-specific risk be diversified away by investing in both Gamco Natural 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 Gamco Natural and Hennessy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Natural Resources and Hennessy Bp Energy, you can compare the effects of market volatilities on Gamco Natural 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 Gamco Natural with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Hennessy.
Diversification Opportunities for Gamco Natural and Hennessy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between GAMCO and Hennessy is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources 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 Gamco Natural 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 Gamco Natural Resources 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 Gamco Natural i.e., Gamco Natural and Hennessy go up and down completely randomly.
Pair Corralation between Gamco Natural and Hennessy
Assuming the 90 days horizon Gamco Natural Resources is expected to under-perform the Hennessy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Gamco Natural Resources is 1.6 times less risky than Hennessy. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Hennessy Bp Energy is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 2,608 in Hennessy Bp Energy on August 27, 2024 and sell it today you would earn a total of 286.00 from holding Hennessy Bp Energy or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco Natural Resources vs. Hennessy Bp Energy
Performance |
| Timeline |
| Gamco Natural Resources |
| Hennessy Bp Energy |
Gamco Natural and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Hennessy
The main advantage of trading using opposite Gamco Natural and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural 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.| Gamco Natural vs. Prudential Real Estate | Gamco Natural vs. Vy Clarion Real | Gamco Natural vs. Pender Real Estate | Gamco Natural vs. Virtus Real Estate |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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