Correlation Between Hannon Armstrong and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and Summit Hotel 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 Summit Hotel 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 Summit Hotel Properties, you can compare the effects of market volatilities on Hannon Armstrong and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and Summit Hotel.
Diversification Opportunities for Hannon Armstrong and Summit Hotel
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hannon and Summit is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and Summit Hotel go up and down completely randomly.
Pair Corralation between Hannon Armstrong and Summit Hotel
Given the investment horizon of 90 days Hannon Armstrong Sustainable is expected to under-perform the Summit Hotel. In addition to that, Hannon Armstrong is 1.65 times more volatile than Summit Hotel Properties. It trades about -0.13 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.11 per unit of volatility. If you would invest 620.00 in Summit Hotel Properties on August 29, 2024 and sell it today you would earn a total of 34.00 from holding Summit Hotel Properties or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannon Armstrong Sustainable vs. Summit Hotel Properties
Performance |
| Timeline |
| Hannon Armstrong Sus |
| Summit Hotel Properties |
Hannon Armstrong and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and Summit Hotel
The main advantage of trading using opposite Hannon Armstrong and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
| Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. RLJ Lodging Trust | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Sunstone Hotel Investors |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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