Correlation Between Worldwide Webb and Hennessy Capital

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Can any of the company-specific risk be diversified away by investing in both Worldwide Webb and Hennessy Capital 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 Worldwide Webb and Hennessy Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldwide Webb Acquisition and Hennessy Capital Investment, you can compare the effects of market volatilities on Worldwide Webb and Hennessy Capital 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 Worldwide Webb with a short position of Hennessy Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldwide Webb and Hennessy Capital.

Diversification Opportunities for Worldwide Webb and Hennessy Capital

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between Worldwide and Hennessy is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Worldwide Webb Acquisition and Hennessy Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Capital Inv and Worldwide Webb 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 Worldwide Webb Acquisition are associated (or correlated) with Hennessy Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Capital Inv has no effect on the direction of Worldwide Webb i.e., Worldwide Webb and Hennessy Capital go up and down completely randomly.

Pair Corralation between Worldwide Webb and Hennessy Capital

If you would invest  1,062  in Hennessy Capital Investment on September 11, 2024 and sell it today you would lose (3.00) from holding Hennessy Capital Investment or give up 0.28% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy1.59%
ValuesDaily Returns

Worldwide Webb Acquisition  vs.  Hennessy Capital Investment

 Performance 
       Timeline  
Worldwide Webb Acqui 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Worldwide Webb Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Worldwide Webb is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Hennessy Capital Inv 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hennessy Capital Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Hennessy Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Worldwide Webb and Hennessy Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Worldwide Webb and Hennessy Capital

The main advantage of trading using opposite Worldwide Webb and Hennessy Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldwide Webb position performs unexpectedly, Hennessy Capital 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 Capital will offset losses from the drop in Hennessy Capital's long position.
The idea behind Worldwide Webb Acquisition and Hennessy Capital Investment 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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