Correlation Between Hannon Armstrong and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and Flexible Solutions 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 Flexible Solutions 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 Flexible Solutions International, you can compare the effects of market volatilities on Hannon Armstrong and Flexible Solutions 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 Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and Flexible Solutions.
Diversification Opportunities for Hannon Armstrong and Flexible Solutions
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hannon and Flexible is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions 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 Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and Flexible Solutions go up and down completely randomly.
Pair Corralation between Hannon Armstrong and Flexible Solutions
Given the investment horizon of 90 days Hannon Armstrong Sustainable is expected to under-perform the Flexible Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Hannon Armstrong Sustainable is 1.35 times less risky than Flexible Solutions. The stock trades about -0.06 of its potential returns per unit of risk. The Flexible Solutions International is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 323.00 in Flexible Solutions International on September 12, 2024 and sell it today you would earn a total of 57.00 from holding Flexible Solutions International or generate 17.65% 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. Flexible Solutions Internation
Performance |
| Timeline |
| Hannon Armstrong Sus |
| Flexible Solutions |
Hannon Armstrong and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and Flexible Solutions
The main advantage of trading using opposite Hannon Armstrong and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
| Flexible Solutions vs. LyondellBasell Industries NV | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Cabot | Flexible Solutions vs. Westlake Chemical |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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