Correlation Between Sunrun and Shunfeng International
Can any of the company-specific risk be diversified away by investing in both Sunrun and Shunfeng International 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 Shunfeng International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and Shunfeng International Clean, you can compare the effects of market volatilities on Sunrun and Shunfeng International 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 Shunfeng International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Shunfeng International.
Diversification Opportunities for Sunrun and Shunfeng International
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunrun and Shunfeng is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Shunfeng International Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shunfeng International 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 Shunfeng International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shunfeng International has no effect on the direction of Sunrun i.e., Sunrun and Shunfeng International go up and down completely randomly.
Pair Corralation between Sunrun and Shunfeng International
Assuming the 90 days horizon Sunrun Inc is expected to under-perform the Shunfeng International. But the stock apears to be less risky and, when comparing its historical volatility, Sunrun Inc is 13.35 times less risky than Shunfeng International. The stock trades about -0.01 of its potential returns per unit of risk. The Shunfeng International Clean is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Shunfeng International Clean on December 2, 2024 and sell it today you would earn a total of 0.10 from holding Shunfeng International Clean or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrun Inc vs. Shunfeng International Clean
Performance |
| Timeline |
| Sunrun Inc |
| Shunfeng International |
Sunrun and Shunfeng International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and Shunfeng International
The main advantage of trading using opposite Sunrun and Shunfeng International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Shunfeng International 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 Shunfeng International will offset losses from the drop in Shunfeng International's long position.| Sunrun vs. Clean Harbors | Sunrun vs. KENEDIX OFFICE INV | Sunrun vs. INVITATION HOMES DL | Sunrun vs. Marie Brizard Wine |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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