Correlation Between Franklin Credit and Hannon Armstrong
Can any of the company-specific risk be diversified away by investing in both Franklin Credit 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 Franklin Credit and Hannon Armstrong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Credit Management and Hannon Armstrong Sustainable, you can compare the effects of market volatilities on Franklin Credit 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 Franklin Credit with a short position of Hannon Armstrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Credit and Hannon Armstrong.
Diversification Opportunities for Franklin Credit and Hannon Armstrong
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Hannon is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Credit Management 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 Franklin Credit 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 Franklin Credit Management 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 Franklin Credit i.e., Franklin Credit and Hannon Armstrong go up and down completely randomly.
Pair Corralation between Franklin Credit and Hannon Armstrong
Given the investment horizon of 90 days Franklin Credit Management is expected to under-perform the Hannon Armstrong. In addition to that, Franklin Credit is 9.69 times more volatile than Hannon Armstrong Sustainable. It trades about -0.04 of its total potential returns per unit of risk. Hannon Armstrong Sustainable is currently generating about 0.05 per unit of volatility. If you would invest 2,789 in Hannon Armstrong Sustainable on November 27, 2024 and sell it today you would earn a total of 46.00 from holding Hannon Armstrong Sustainable or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Credit Management vs. Hannon Armstrong Sustainable
Performance |
| Timeline |
| Franklin Credit Mana |
| Hannon Armstrong Sus |
Franklin Credit and Hannon Armstrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Credit and Hannon Armstrong
The main advantage of trading using opposite Franklin Credit and Hannon Armstrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Credit 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.| Franklin Credit vs. Ares Dynamic Credit | Franklin Credit vs. PGIM Short Duration | Franklin Credit vs. Ecofin Sustainable And | Franklin Credit vs. Aberdeen Total Dynamic |
| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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