Correlation Between Sealed Air and Hannon Armstrong
Can any of the company-specific risk be diversified away by investing in both Sealed Air 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 Sealed Air and Hannon Armstrong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Hannon Armstrong Sustainable, you can compare the effects of market volatilities on Sealed Air 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 Sealed Air with a short position of Hannon Armstrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Hannon Armstrong.
Diversification Opportunities for Sealed Air and Hannon Armstrong
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sealed and Hannon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air 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 Sealed Air 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 Sealed Air 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 Sealed Air i.e., Sealed Air and Hannon Armstrong go up and down completely randomly.
Pair Corralation between Sealed Air and Hannon Armstrong
Considering the 90-day investment horizon Sealed Air is expected to generate 0.37 times more return on investment than Hannon Armstrong. However, Sealed Air is 2.68 times less risky than Hannon Armstrong. It trades about -0.02 of its potential returns per unit of risk. Hannon Armstrong Sustainable is currently generating about -0.11 per unit of risk. If you would invest 3,658 in Sealed Air on August 31, 2024 and sell it today you would lose (34.00) from holding Sealed Air or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Hannon Armstrong Sustainable
Performance |
| Timeline |
| Sealed Air |
| Hannon Armstrong Sus |
Sealed Air and Hannon Armstrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Hannon Armstrong
The main advantage of trading using opposite Sealed Air and Hannon Armstrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air 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.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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