Correlation Between Hennessy and Cohen Steers

Can any of the company-specific risk be diversified away by investing in both Hennessy and Cohen Steers 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 and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hennessy Bp Midstream and Cohen Steers Mlp, you can compare the effects of market volatilities on Hennessy and Cohen Steers 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 with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Cohen Steers.

Diversification Opportunities for Hennessy and Cohen Steers

0.52

Correlation Coefficient

Hennessy  Cohen Steers

Very weak diversification

The 3 months correlation between Hennessy and Cohen is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Midstream and Cohen Steers Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Mlp and Hennessy 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 Bp Midstream are associated (or correlated) with Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Mlp has no effect on the direction of Hennessy i.e., Hennessy and Cohen Steers go up and down completely randomly.

Pair Corralation between Hennessy and Cohen Steers

Assuming the 90 days horizon Hennessy Bp Midstream is expected to generate 1.02 times more return on investment than Cohen Steers. However, Hennessy is 1.02 times more volatile than Cohen Steers Mlp. It trades about 0.07 of its potential returns per unit of risk. Cohen Steers Mlp is currently generating about -0.03 per unit of risk. If you would invest  1,111  in Hennessy Bp Midstream on September 24, 2024 and sell it today you would earn a total of  137.00  from holding Hennessy Bp Midstream or generate 12.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hennessy Bp Midstream  vs.  Cohen Steers Mlp

Hennessy Bp Midstream

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Bp Midstream are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hennessy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cohen Steers Mlp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Mlp has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hennessy and Cohen Steers

The main advantage of trading using opposite Hennessy and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Cohen Steers 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 Cohen Steers will offset losses from the drop in Cohen Steers' long position.

The idea behind Hennessy Bp Midstream and Cohen Steers Mlp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.