Correlation Between PennantPark Floating and Hannon Armstrong
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Hannon Armstrong 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 PennantPark Floating and Hannon Armstrong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Floating Rate and Hannon Armstrong Sustainable, you can compare the effects of market volatilities on PennantPark Floating and Hannon Armstrong 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 PennantPark Floating with a short position of Hannon Armstrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Hannon Armstrong.
Diversification Opportunities for PennantPark Floating and Hannon Armstrong
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Hannon is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Hannon Armstrong Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannon Armstrong Sus and PennantPark Floating 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 PennantPark Floating Rate are associated (or correlated) with Hannon Armstrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannon Armstrong Sus has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Hannon Armstrong go up and down completely randomly.
Pair Corralation between PennantPark Floating and Hannon Armstrong
Given the investment horizon of 90 days PennantPark Floating is expected to generate 3.57 times less return on investment than Hannon Armstrong. But when comparing it to its historical volatility, PennantPark Floating Rate is 3.42 times less risky than Hannon Armstrong. It trades about 0.07 of its potential returns per unit of risk. Hannon Armstrong Sustainable is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,924 in Hannon Armstrong Sustainable on September 1, 2024 and sell it today you would earn a total of 1,212 from holding Hannon Armstrong Sustainable or generate 62.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Hannon Armstrong Sustainable
Performance |
| Timeline |
| PennantPark Floating Rate |
| Hannon Armstrong Sus |
PennantPark Floating and Hannon Armstrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Hannon Armstrong
The main advantage of trading using opposite PennantPark Floating and Hannon Armstrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Hannon Armstrong 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 Hannon Armstrong will offset losses from the drop in Hannon Armstrong's long position.| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Distoken Acquisition | PennantPark Floating vs. Associated Capital Group |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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