Correlation Between Columbia Amt-free and Hennessy

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

By analyzing existing cross correlation between Columbia Amt Free Massachusetts and Hennessy Bp Energy, you can compare the effects of market volatilities on Columbia Amt-free 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 Columbia Amt-free with a short position of Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Amt-free and Hennessy.

Diversification Opportunities for Columbia Amt-free and Hennessy

-0.16

Correlation Coefficient

Columbia Amt-free  Hennessy

Good diversification

The 3 months correlation between Columbia and Hennessy is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Amt Free Massachusett 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 Columbia Amt-free 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 Columbia Amt Free Massachusetts 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 Columbia Amt-free i.e., Columbia Amt-free and Hennessy go up and down completely randomly.

Pair Corralation between Columbia Amt-free and Hennessy

Assuming the 90 days horizon Columbia Amt Free Massachusetts is expected to under-perform the Hennessy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Columbia Amt Free Massachusetts is 6.89 times less risky than Hennessy. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Hennessy Bp Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,670  in Hennessy Bp Energy on December 28, 2024 and sell it today you would earn a total of  198.00  from holding Hennessy Bp Energy or generate 7.42% return on investment over 90 days.

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

Columbia Amt Free Massachusett  vs.  Hennessy Bp Energy

Columbia Amt Free

Risk-Adjusted Performance

Very Weak

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

Hennessy Bp Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Bp Energy are ranked lower than 8 (%) 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 April 2025.

Pair Trading with Columbia Amt-free and Hennessy

The main advantage of trading using opposite Columbia Amt-free and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Amt-free 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.

The idea behind Columbia Amt Free Massachusetts and Hennessy Bp Energy 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.