Correlation Between Hannon Armstrong and Equinix
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and Equinix 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 Equinix 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 Equinix, you can compare the effects of market volatilities on Hannon Armstrong and Equinix 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 Equinix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and Equinix.
Diversification Opportunities for Hannon Armstrong and Equinix
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hannon and Equinix is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix 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 Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and Equinix go up and down completely randomly.
Pair Corralation between Hannon Armstrong and Equinix
Given the investment horizon of 90 days Hannon Armstrong Sustainable is expected to under-perform the Equinix. In addition to that, Hannon Armstrong is 3.32 times more volatile than Equinix. It trades about -0.18 of its total potential returns per unit of risk. Equinix is currently generating about 0.12 per unit of volatility. If you would invest 91,002 in Equinix on August 26, 2024 and sell it today you would earn a total of 2,635 from holding Equinix or generate 2.9% 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. Equinix
Performance |
| Timeline |
| Hannon Armstrong Sus |
| Equinix |
Hannon Armstrong and Equinix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and Equinix
The main advantage of trading using opposite Hannon Armstrong and Equinix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, Equinix 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 Equinix will offset losses from the drop in Equinix's long position.| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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