Correlation Between Hennessy and Rbc Funds

Can any of the company-specific risk be diversified away by investing in both Hennessy and Rbc Funds 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 Rbc Funds 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 Rbc Funds Trust, you can compare the effects of market volatilities on Hennessy and Rbc Funds 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 Rbc Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Rbc Funds.

Diversification Opportunities for Hennessy and Rbc Funds

-0.52

Correlation Coefficient

Hennessy  Rbc Funds

Excellent diversification

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

Pair Corralation between Hennessy and Rbc Funds

Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 1.32 times more return on investment than Rbc Funds. However, Hennessy is 1.32 times more volatile than Rbc Funds Trust. It trades about 0.17 of its potential returns per unit of risk. Rbc Funds Trust is currently generating about -0.1 per unit of risk. If you would invest  2,615  in Hennessy Bp Energy on October 24, 2024 and sell it today you would earn a total of  309.00  from holding Hennessy Bp Energy or generate 11.82% return on investment over 90 days.

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

Hennessy Bp Energy  vs.  Rbc Funds Trust

Hennessy Bp Energy

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Bp Energy are ranked lower than 13 (%) 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 February 2025.

Rbc Funds Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Funds Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Rbc Funds 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 Rbc Funds

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

The idea behind Hennessy Bp Energy and Rbc Funds Trust 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.