Correlation Between Crane and Sunrun
Can any of the company-specific risk be diversified away by investing in both Crane 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 Crane and Sunrun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Sunrun Inc, you can compare the effects of market volatilities on Crane 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 Crane with a short position of Sunrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Sunrun.
Diversification Opportunities for Crane and Sunrun
Pay attention - limited upside
The 3 months correlation between Crane and Sunrun is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc and Crane 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 Crane Company 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 Crane i.e., Crane and Sunrun go up and down completely randomly.
Pair Corralation between Crane and Sunrun
Allowing for the 90-day total investment horizon Crane Company is expected to generate 0.47 times more return on investment than Sunrun. However, Crane Company is 2.13 times less risky than Sunrun. It trades about 0.06 of its potential returns per unit of risk. Sunrun Inc is currently generating about -0.01 per unit of risk. If you would invest 10,057 in Crane Company on August 28, 2024 and sell it today you would earn a total of 8,423 from holding Crane Company or generate 83.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. Sunrun Inc
Performance |
| Timeline |
| Crane Company |
| Sunrun Inc |
Crane and Sunrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Sunrun
The main advantage of trading using opposite Crane and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane 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.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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