Correlation Between Atkore International and Hannon Armstrong
Can any of the company-specific risk be diversified away by investing in both Atkore International and Hannon Armstrong 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 Atkore International and Hannon Armstrong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atkore International Group and Hannon Armstrong Sustainable, you can compare the effects of market volatilities on Atkore International and Hannon Armstrong 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 Atkore International with a short position of Hannon Armstrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atkore International and Hannon Armstrong.
Diversification Opportunities for Atkore International and Hannon Armstrong
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atkore and Hannon is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Atkore International Group and Hannon Armstrong Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannon Armstrong Sus and Atkore International 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 Atkore International Group are associated (or correlated) with Hannon Armstrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannon Armstrong Sus has no effect on the direction of Atkore International i.e., Atkore International and Hannon Armstrong go up and down completely randomly.
Pair Corralation between Atkore International and Hannon Armstrong
Given the investment horizon of 90 days Atkore International Group is expected to under-perform the Hannon Armstrong. But the stock apears to be less risky and, when comparing its historical volatility, Atkore International Group is 1.3 times less risky than Hannon Armstrong. The stock trades about -0.03 of its potential returns per unit of risk. The Hannon Armstrong Sustainable is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,303 in Hannon Armstrong Sustainable on August 27, 2024 and sell it today you would lose (402.00) from holding Hannon Armstrong Sustainable or give up 12.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atkore International Group vs. Hannon Armstrong Sustainable
Performance |
| Timeline |
| Atkore International |
| Hannon Armstrong Sus |
Atkore International and Hannon Armstrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atkore International and Hannon Armstrong
The main advantage of trading using opposite Atkore International and Hannon Armstrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atkore International position performs unexpectedly, Hannon Armstrong 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 Hannon Armstrong will offset losses from the drop in Hannon Armstrong's long position.| Atkore International vs. Hubbell | Atkore International vs. Enersys | Atkore International vs. Advanced Energy Industries | Atkore International vs. nVent Electric PLC |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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