Correlation Between Hannon Armstrong and Phillips Edison
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and Phillips Edison 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 Phillips Edison 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 Phillips Edison Co, you can compare the effects of market volatilities on Hannon Armstrong and Phillips Edison 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 Phillips Edison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and Phillips Edison.
Diversification Opportunities for Hannon Armstrong and Phillips Edison
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hannon and Phillips is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and Phillips Edison Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips Edison 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 Phillips Edison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips Edison has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and Phillips Edison go up and down completely randomly.
Pair Corralation between Hannon Armstrong and Phillips Edison
Given the investment horizon of 90 days Hannon Armstrong Sustainable is expected to generate 2.43 times more return on investment than Phillips Edison. However, Hannon Armstrong is 2.43 times more volatile than Phillips Edison Co. It trades about 0.05 of its potential returns per unit of risk. Phillips Edison Co is currently generating about 0.05 per unit of risk. If you would invest 2,387 in Hannon Armstrong Sustainable on September 2, 2024 and sell it today you would earn a total of 749.00 from holding Hannon Armstrong Sustainable or generate 31.38% 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. Phillips Edison Co
Performance |
| Timeline |
| Hannon Armstrong Sus |
| Phillips Edison |
Hannon Armstrong and Phillips Edison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and Phillips Edison
The main advantage of trading using opposite Hannon Armstrong and Phillips Edison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, Phillips Edison 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 Phillips Edison will offset losses from the drop in Phillips Edison's long position.| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
| Phillips Edison vs. Site Centers Corp | Phillips Edison vs. Retail Opportunity Investments | Phillips Edison vs. Urban Edge Properties | Phillips Edison vs. Netstreit Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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