Correlation Between Hennessy Gas and Us Government
Can any of the company-specific risk be diversified away by investing in both Hennessy Gas and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Hennessy Gas and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy Gas and Us Government.
Diversification Opportunities for Hennessy Gas and Us Government
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hennessy and UGSDX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Gas Utility and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Hennessy Gas i.e., Hennessy Gas and Us Government go up and down completely randomly.
Pair Corralation between Hennessy Gas and Us Government
Assuming the 90 days horizon Hennessy Gas Utility is expected to under-perform the Us Government. In addition to that, Hennessy Gas is 10.28 times more volatile than Us Government Securities. It trades about -0.07 of its total potential returns per unit of risk. Us Government Securities is currently generating about 0.15 per unit of volatility. If you would invest 194.00 in Us Government Securities on April 6, 2025 and sell it today you would earn a total of 1.00 from holding Us Government Securities or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Gas Utility vs. Us Government Securities
Performance |
| Timeline |
| Hennessy Gas Utility |
| Us Government Securities |
Hennessy Gas and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy Gas and Us Government
The main advantage of trading using opposite Hennessy Gas and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy Gas position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Hennessy Gas vs. Dunham Porategovernment Bond | Hennessy Gas vs. Franklin Adjustable Government | Hennessy Gas vs. International Government Bond | Hennessy Gas vs. Davis Government Bond |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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