Correlation Between Amg Yacktman and Hennessy Gas
Can any of the company-specific risk be diversified away by investing in both Amg Yacktman and Hennessy Gas 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 Amg Yacktman and Hennessy Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Yacktman Focused and Hennessy Gas Utility, you can compare the effects of market volatilities on Amg Yacktman and Hennessy Gas 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 Amg Yacktman with a short position of Hennessy Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Yacktman and Hennessy Gas.
Diversification Opportunities for Amg Yacktman and Hennessy Gas
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amg and Hennessy is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Amg Yacktman Focused and Hennessy Gas Utility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Gas Utility and Amg Yacktman 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 Amg Yacktman Focused are associated (or correlated) with Hennessy Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Gas Utility has no effect on the direction of Amg Yacktman i.e., Amg Yacktman and Hennessy Gas go up and down completely randomly.
Pair Corralation between Amg Yacktman and Hennessy Gas
Assuming the 90 days horizon Amg Yacktman Focused is expected to under-perform the Hennessy Gas. In addition to that, Amg Yacktman is 1.04 times more volatile than Hennessy Gas Utility. It trades about -0.05 of its total potential returns per unit of risk. Hennessy Gas Utility is currently generating about 0.09 per unit of volatility. If you would invest 2,467 in Hennessy Gas Utility on November 3, 2024 and sell it today you would earn a total of 246.00 from holding Hennessy Gas Utility or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Yacktman Focused vs. Hennessy Gas Utility
Performance |
| Timeline |
| Amg Yacktman Focused |
| Hennessy Gas Utility |
Amg Yacktman and Hennessy Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Yacktman and Hennessy Gas
The main advantage of trading using opposite Amg Yacktman and Hennessy Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Yacktman position performs unexpectedly, Hennessy Gas 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 Gas will offset losses from the drop in Hennessy Gas' long position.| Amg Yacktman vs. Amg Yacktman Fund | Amg Yacktman vs. Permanent Portfolio Class | Amg Yacktman vs. Oakmark International Fund | Amg Yacktman vs. Matthews Asia Dividend |
| Hennessy Gas vs. Utilities Fund Investor | Hennessy Gas vs. Amg Yacktman Focused | Hennessy Gas vs. Chemicals Portfolio Chemicals | Hennessy Gas vs. Invesco Energy Fund |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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