Correlation Between Hannon Armstrong and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and PennantPark Floating 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 PennantPark Floating 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 PennantPark Floating Rate, you can compare the effects of market volatilities on Hannon Armstrong and PennantPark Floating 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 PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and PennantPark Floating.
Diversification Opportunities for Hannon Armstrong and PennantPark Floating
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hannon and PennantPark is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate 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 PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and PennantPark Floating go up and down completely randomly.
Pair Corralation between Hannon Armstrong and PennantPark Floating
Given the investment horizon of 90 days Hannon Armstrong Sustainable is expected to generate 1.48 times more return on investment than PennantPark Floating. However, Hannon Armstrong is 1.48 times more volatile than PennantPark Floating Rate. It trades about 0.05 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.05 per unit of risk. If you would invest 2,789 in Hannon Armstrong Sustainable on November 27, 2024 and sell it today you would earn a total of 46.00 from holding Hannon Armstrong Sustainable or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannon Armstrong Sustainable vs. PennantPark Floating Rate
Performance |
| Timeline |
| Hannon Armstrong Sus |
| PennantPark Floating Rate |
Hannon Armstrong and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and PennantPark Floating
The main advantage of trading using opposite Hannon Armstrong and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating's long position.| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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