Correlation Between Hennessy and Rmb Mendon

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

Diversification Opportunities for Hennessy and Rmb Mendon

0.49

Correlation Coefficient

Hennessy  Rmb Mendon

Very weak diversification

The 3 months correlation between Hennessy and Rmb is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Rmb Mendon Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Mendon Financial 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 Rmb Mendon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Mendon Financial has no effect on the direction of Hennessy i.e., Hennessy and Rmb Mendon go up and down completely randomly.

Pair Corralation between Hennessy and Rmb Mendon

Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 0.84 times more return on investment than Rmb Mendon. However, Hennessy Bp Energy is 1.19 times less risky than Rmb Mendon. It trades about 0.1 of its potential returns per unit of risk. Rmb Mendon Financial is currently generating about 0.04 per unit of risk. If you would invest  2,552  in Hennessy Bp Energy on May 6, 2025 and sell it today you would earn a total of  175.00  from holding Hennessy Bp Energy or generate 6.86% return on investment over 90 days.

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

Hennessy Bp Energy  vs.  Rmb Mendon Financial

Hennessy Bp Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hennessy Bp Energy are ranked lower than 7 (%) 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 September 2025.

Rmb Mendon Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rmb Mendon Financial are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Rmb Mendon 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 Rmb Mendon

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

The idea behind Hennessy Bp Energy and Rmb Mendon Financial 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.