Correlation Between Hennessy and Oppenheimer Senior
Can any of the company-specific risk be diversified away by investing in both Hennessy and Oppenheimer Senior 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 Oppenheimer Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Bp Energy and Oppenheimer Senior Floating, you can compare the effects of market volatilities on Hennessy and Oppenheimer Senior 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 Oppenheimer Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Oppenheimer Senior.
Diversification Opportunities for Hennessy and Oppenheimer Senior
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hennessy and Oppenheimer is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Oppenheimer Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Senior 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 Energy are associated (or correlated) with Oppenheimer Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Senior has no effect on the direction of Hennessy i.e., Hennessy and Oppenheimer Senior go up and down completely randomly.
Pair Corralation between Hennessy and Oppenheimer Senior
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 10.28 times more return on investment than Oppenheimer Senior. However, Hennessy is 10.28 times more volatile than Oppenheimer Senior Floating. It trades about 0.02 of its potential returns per unit of risk. Oppenheimer Senior Floating is currently generating about 0.07 per unit of risk. If you would invest 2,700 in Hennessy Bp Energy on October 9, 2024 and sell it today you would earn a total of 35.00 from holding Hennessy Bp Energy or generate 1.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hennessy Bp Energy vs. Oppenheimer Senior Floating
Performance |
Timeline |
Hennessy Bp Energy |
Oppenheimer Senior |
Hennessy and Oppenheimer Senior Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hennessy and Oppenheimer Senior
The main advantage of trading using opposite Hennessy and Oppenheimer Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy position performs unexpectedly, Oppenheimer Senior 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 Oppenheimer Senior will offset losses from the drop in Oppenheimer Senior's long position.Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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