Correlation Between Sunrun and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Sunrun and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and Dow Jones Industrial, you can compare the effects of market volatilities on Sunrun and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Dow Jones.
Diversification Opportunities for Sunrun and Dow Jones
Poor diversification
The 3 months correlation between Sunrun and Dow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Sunrun i.e., Sunrun and Dow Jones go up and down completely randomly.
Pair Corralation between Sunrun and Dow Jones
Assuming the 90 days horizon Sunrun Inc is expected to under-perform the Dow Jones. In addition to that, Sunrun is 3.32 times more volatile than Dow Jones Industrial. It trades about -0.13 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.04 per unit of volatility. If you would invest 4,229,712 in Dow Jones Industrial on January 12, 2025 and sell it today you would lose (208,441) from holding Dow Jones Industrial or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sunrun Inc vs. Dow Jones Industrial
Performance |
| Timeline |
Sunrun and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Sunrun Inc
Pair trading matchups for Sunrun
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sunrun and Dow Jones
The main advantage of trading using opposite Sunrun and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Sunrun vs. SolarEdge Technologies | Sunrun vs. Xinyi Solar Holdings | Sunrun vs. SMA SOLAR T | Sunrun vs. Canadian Solar |
| Dow Jones vs. Presidio Property Trust | Dow Jones vs. AG Mortgage Investment | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. NorthWestern |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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