Correlation Between Aurora Solar and Sunrun
Can any of the company-specific risk be diversified away by investing in both Aurora Solar and Sunrun 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 Aurora Solar and Sunrun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Solar Technologies and Sunrun Inc, you can compare the effects of market volatilities on Aurora Solar and Sunrun 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 Aurora Solar with a short position of Sunrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Solar and Sunrun.
Diversification Opportunities for Aurora Solar and Sunrun
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurora and Sunrun is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Solar Technologies and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc and Aurora Solar 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 Aurora Solar Technologies are associated (or correlated) with Sunrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunrun Inc has no effect on the direction of Aurora Solar i.e., Aurora Solar and Sunrun go up and down completely randomly.
Pair Corralation between Aurora Solar and Sunrun
Assuming the 90 days horizon Aurora Solar Technologies is expected to generate 2.0 times more return on investment than Sunrun. However, Aurora Solar is 2.0 times more volatile than Sunrun Inc. It trades about 0.09 of its potential returns per unit of risk. Sunrun Inc is currently generating about -0.1 per unit of risk. If you would invest 1.70 in Aurora Solar Technologies on November 4, 2024 and sell it today you would earn a total of 0.15 from holding Aurora Solar Technologies or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aurora Solar Technologies vs. Sunrun Inc
Performance |
| Timeline |
| Aurora Solar Technologies |
| Sunrun Inc |
Aurora Solar and Sunrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Solar and Sunrun
The main advantage of trading using opposite Aurora Solar and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Solar position performs unexpectedly, Sunrun 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 Sunrun will offset losses from the drop in Sunrun's long position.| Aurora Solar vs. Xinyi Solar Holdings | Aurora Solar vs. Xinyi Solar Holdings | Aurora Solar vs. Nextracker Class A | Aurora Solar vs. TGI Solar Power |
| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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