Correlation Between Hennessy Gas and Utilities Fund
Can any of the company-specific risk be diversified away by investing in both Hennessy Gas and Utilities Fund 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 Gas and Utilities Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Gas Utility and Utilities Fund Investor, you can compare the effects of market volatilities on Hennessy Gas and Utilities Fund 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 Gas with a short position of Utilities Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Gas and Utilities Fund.
Diversification Opportunities for Hennessy Gas and Utilities Fund
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hennessy and Utilities is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Gas Utility and Utilities Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Fund Investor and Hennessy Gas 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 Gas Utility are associated (or correlated) with Utilities Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Fund Investor has no effect on the direction of Hennessy Gas i.e., Hennessy Gas and Utilities Fund go up and down completely randomly.
Pair Corralation between Hennessy Gas and Utilities Fund
Assuming the 90 days horizon Hennessy Gas is expected to generate 1.92 times less return on investment than Utilities Fund. But when comparing it to its historical volatility, Hennessy Gas Utility is 1.13 times less risky than Utilities Fund. It trades about 0.11 of its potential returns per unit of risk. Utilities Fund Investor is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,958 in Utilities Fund Investor on July 19, 2025 and sell it today you would earn a total of 183.00 from holding Utilities Fund Investor or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Hennessy Gas Utility vs. Utilities Fund Investor
Performance |
| Timeline |
| Hennessy Gas Utility |
| Utilities Fund Investor |
Hennessy Gas and Utilities Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Gas and Utilities Fund
The main advantage of trading using opposite Hennessy Gas and Utilities Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Gas position performs unexpectedly, Utilities Fund 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 Utilities Fund will offset losses from the drop in Utilities Fund's long position.| Hennessy Gas vs. Hennessy Nerstone Growth | Hennessy Gas vs. Hennessy Nerstone Value | Hennessy Gas vs. Hennessy Nerstone Mid | Hennessy Gas vs. Hennessy Large Cap |
| Utilities Fund vs. Real Estate Fund | Utilities Fund vs. Emerging Markets Fund | Utilities Fund vs. Heritage Fund Investor | Utilities Fund vs. Global Gold 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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