Correlation Between Hannon Armstrong and Western Acquisition
Can any of the company-specific risk be diversified away by investing in both Hannon Armstrong and Western Acquisition 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 Western Acquisition 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 Western Acquisition Ventures, you can compare the effects of market volatilities on Hannon Armstrong and Western Acquisition 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 Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannon Armstrong and Western Acquisition.
Diversification Opportunities for Hannon Armstrong and Western Acquisition
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hannon and Western is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hannon Armstrong Sustainable and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of Hannon Armstrong i.e., Hannon Armstrong and Western Acquisition go up and down completely randomly.
Pair Corralation between Hannon Armstrong and Western Acquisition
Given the investment horizon of 90 days Hannon Armstrong Sustainable is expected to under-perform the Western Acquisition. In addition to that, Hannon Armstrong is 2.16 times more volatile than Western Acquisition Ventures. It trades about -0.11 of its total potential returns per unit of risk. Western Acquisition Ventures is currently generating about -0.15 per unit of volatility. If you would invest 1,160 in Western Acquisition Ventures on September 1, 2024 and sell it today you would lose (68.00) from holding Western Acquisition Ventures or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannon Armstrong Sustainable vs. Western Acquisition Ventures
Performance |
| Timeline |
| Hannon Armstrong Sus |
| Western Acquisition |
Hannon Armstrong and Western Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannon Armstrong and Western Acquisition
The main advantage of trading using opposite Hannon Armstrong and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannon Armstrong position performs unexpectedly, Western Acquisition 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 Western Acquisition will offset losses from the drop in Western Acquisition's long position.| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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