Correlation Between Hannon Armstrong and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and Franklin Credit 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 Franklin Credit 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 Franklin Credit Management, you can compare the effects of market volatilities on Hannon Armstrong and Franklin Credit 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 Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and Franklin Credit.
Diversification Opportunities for Hannon Armstrong and Franklin Credit
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hannon and Franklin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana 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 Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and Franklin Credit go up and down completely randomly.
Pair Corralation between Hannon Armstrong and Franklin Credit
Given the investment horizon of 90 days Hannon Armstrong Sustainable is expected to generate 0.72 times more return on investment than Franklin Credit. However, Hannon Armstrong Sustainable is 1.39 times less risky than Franklin Credit. It trades about -0.11 of its potential returns per unit of risk. Franklin Credit Management is currently generating about -0.11 per unit of risk. If you would invest 3,499 in Hannon Armstrong Sustainable on September 1, 2024 and sell it today you would lose (363.00) from holding Hannon Armstrong Sustainable or give up 10.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannon Armstrong Sustainable vs. Franklin Credit Management
Performance |
| Timeline |
| Hannon Armstrong Sus |
| Franklin Credit Mana |
Hannon Armstrong and Franklin Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and Franklin Credit
The main advantage of trading using opposite Hannon Armstrong and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, Franklin Credit 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 Franklin Credit will offset losses from the drop in Franklin Credit's long position.| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
| Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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