Correlation Between Hannon Armstrong and Digital Realty
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and Digital Realty 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 Hannon Armstrong and Digital Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannon Armstrong Sustainable and Digital Realty Trust, you can compare the effects of market volatilities on Hannon Armstrong and Digital Realty 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 Hannon Armstrong with a short position of Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and Digital Realty.
Diversification Opportunities for Hannon Armstrong and Digital Realty
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hannon and Digital is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and Digital Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Realty Trust and Hannon Armstrong 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 Hannon Armstrong Sustainable are associated (or correlated) with Digital Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Realty Trust has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and Digital Realty go up and down completely randomly.
Pair Corralation between Hannon Armstrong and Digital Realty
Given the investment horizon of 90 days Hannon Armstrong Sustainable is expected to under-perform the Digital Realty. In addition to that, Hannon Armstrong is 1.62 times more volatile than Digital Realty Trust. It trades about -0.02 of its total potential returns per unit of risk. Digital Realty Trust is currently generating about 0.15 per unit of volatility. If you would invest 14,151 in Digital Realty Trust on August 24, 2024 and sell it today you would earn a total of 4,586 from holding Digital Realty Trust or generate 32.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannon Armstrong Sustainable vs. Digital Realty Trust
Performance |
| Timeline |
| Hannon Armstrong Sus |
| Digital Realty Trust |
Hannon Armstrong and Digital Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and Digital Realty
The main advantage of trading using opposite Hannon Armstrong and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, Digital Realty 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 Digital Realty will offset losses from the drop in Digital Realty's long position.| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
| Digital Realty vs. American Tower Corp | Digital Realty vs. Crown Castle | Digital Realty vs. Iron Mountain Incorporated | Digital Realty vs. SBA Communications Corp |
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.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |