Correlation Between Sunrun and Xinyi Solar
Can any of the company-specific risk be diversified away by investing in both Sunrun and Xinyi Solar 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 Sunrun and Xinyi Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and Xinyi Solar Holdings, you can compare the effects of market volatilities on Sunrun and Xinyi Solar 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 Sunrun with a short position of Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Xinyi Solar.
Diversification Opportunities for Sunrun and Xinyi Solar
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunrun and Xinyi is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Xinyi Solar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Solar Holdings and Sunrun 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 Sunrun Inc are associated (or correlated) with Xinyi Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Solar Holdings has no effect on the direction of Sunrun i.e., Sunrun and Xinyi Solar go up and down completely randomly.
Pair Corralation between Sunrun and Xinyi Solar
Assuming the 90 days horizon Sunrun Inc is expected to under-perform the Xinyi Solar. But the stock apears to be less risky and, when comparing its historical volatility, Sunrun Inc is 1.14 times less risky than Xinyi Solar. The stock trades about -0.12 of its potential returns per unit of risk. The Xinyi Solar Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Xinyi Solar Holdings on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Xinyi Solar Holdings or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrun Inc vs. Xinyi Solar Holdings
Performance |
| Timeline |
| Sunrun Inc |
| Xinyi Solar Holdings |
Sunrun and Xinyi Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and Xinyi Solar
The main advantage of trading using opposite Sunrun and Xinyi Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Xinyi Solar 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 Xinyi Solar will offset losses from the drop in Xinyi Solar's long position.| Sunrun vs. Xinyi Solar Holdings | Sunrun vs. Superior Plus Corp | Sunrun vs. NMI Holdings | Sunrun vs. Origin Agritech |
| Xinyi Solar vs. Superior Plus Corp | Xinyi Solar vs. NMI Holdings | Xinyi Solar vs. Origin Agritech | Xinyi Solar vs. SIVERS SEMICONDUCTORS AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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