Correlation Between Virgin Group and Hannon Armstrong
Can any of the company-specific risk be diversified away by investing in both Virgin Group 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 Virgin Group and Hannon Armstrong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virgin Group Acquisition and Hannon Armstrong Sustainable, you can compare the effects of market volatilities on Virgin Group 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 Virgin Group with a short position of Hannon Armstrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Group and Hannon Armstrong.
Diversification Opportunities for Virgin Group and Hannon Armstrong
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virgin and Hannon is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Group Acquisition 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 Virgin Group 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 Virgin Group Acquisition 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 Virgin Group i.e., Virgin Group and Hannon Armstrong go up and down completely randomly.
Pair Corralation between Virgin Group and Hannon Armstrong
Given the investment horizon of 90 days Virgin Group is expected to generate 4.1 times less return on investment than Hannon Armstrong. In addition to that, Virgin Group is 1.32 times more volatile than Hannon Armstrong Sustainable. It trades about 0.01 of its total potential returns per unit of risk. Hannon Armstrong Sustainable is currently generating about 0.06 per unit of volatility. If you would invest 2,537 in Hannon Armstrong Sustainable on September 3, 2024 and sell it today you would earn a total of 599.00 from holding Hannon Armstrong Sustainable or generate 23.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virgin Group Acquisition vs. Hannon Armstrong Sustainable
Performance |
| Timeline |
| Virgin Group Acquisition |
| Hannon Armstrong Sus |
Virgin Group and Hannon Armstrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Group and Hannon Armstrong
The main advantage of trading using opposite Virgin Group and Hannon Armstrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Group 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.| Virgin Group vs. Mannatech Incorporated | Virgin Group vs. Edgewell Personal Care | Virgin Group vs. Inter Parfums | Virgin Group vs. Nu Skin Enterprises |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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