Correlation Between Hannon Armstrong and Farmland Partners
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and Farmland Partners 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 Farmland Partners 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 Farmland Partners, you can compare the effects of market volatilities on Hannon Armstrong and Farmland Partners 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 Farmland Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and Farmland Partners.
Diversification Opportunities for Hannon Armstrong and Farmland Partners
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hannon and Farmland is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and Farmland Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmland Partners 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 Farmland Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmland Partners has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and Farmland Partners go up and down completely randomly.
Pair Corralation between Hannon Armstrong and Farmland Partners
Given the investment horizon of 90 days Hannon Armstrong Sustainable is expected to under-perform the Farmland Partners. In addition to that, Hannon Armstrong is 2.05 times more volatile than Farmland Partners. It trades about -0.2 of its total potential returns per unit of risk. Farmland Partners is currently generating about 0.33 per unit of volatility. If you would invest 1,110 in Farmland Partners on August 27, 2024 and sell it today you would earn a total of 145.00 from holding Farmland Partners or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannon Armstrong Sustainable vs. Farmland Partners
Performance |
| Timeline |
| Hannon Armstrong Sus |
| Farmland Partners |
Hannon Armstrong and Farmland Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and Farmland Partners
The main advantage of trading using opposite Hannon Armstrong and Farmland Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, Farmland Partners 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 Farmland Partners will offset losses from the drop in Farmland Partners' long position.| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
| Farmland Partners vs. Broadstone Net Lease | Farmland Partners vs. Armada Hflr Pr | Farmland Partners vs. Brightspire Capital | Farmland Partners vs. Safehold |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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