Correlation Between Enphase Energy and Sunnova Energy
Can any of the company-specific risk be diversified away by investing in both Enphase Energy and Sunnova Energy 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 Enphase Energy and Sunnova Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and Sunnova Energy International, you can compare the effects of market volatilities on Enphase Energy and Sunnova Energy 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 Enphase Energy with a short position of Sunnova Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and Sunnova Energy.
Diversification Opportunities for Enphase Energy and Sunnova Energy
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Enphase and Sunnova is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and Sunnova Energy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunnova Energy Inter and Enphase Energy 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 Enphase Energy are associated (or correlated) with Sunnova Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunnova Energy Inter has no effect on the direction of Enphase Energy i.e., Enphase Energy and Sunnova Energy go up and down completely randomly.
Pair Corralation between Enphase Energy and Sunnova Energy
Given the investment horizon of 90 days Enphase Energy is expected to under-perform the Sunnova Energy. But the stock apears to be less risky and, when comparing its historical volatility, Enphase Energy is 2.73 times less risky than Sunnova Energy. The stock trades about -0.11 of its potential returns per unit of risk. The Sunnova Energy International is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 535.00 in Sunnova Energy International on August 28, 2024 and sell it today you would lose (1.00) from holding Sunnova Energy International or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. Sunnova Energy International
Performance |
| Timeline |
| Enphase Energy |
| Sunnova Energy Inter |
Enphase Energy and Sunnova Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and Sunnova Energy
The main advantage of trading using opposite Enphase Energy and Sunnova Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy position performs unexpectedly, Sunnova Energy 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 Sunnova Energy will offset losses from the drop in Sunnova Energy's long position.| Enphase Energy vs. First Solar | Enphase Energy vs. Sunrun Inc | Enphase Energy vs. Canadian Solar | Enphase Energy vs. SolarEdge Technologies |
| Sunnova Energy vs. Enphase Energy | Sunnova Energy vs. First Solar | Sunnova Energy vs. SolarEdge Technologies | Sunnova Energy vs. JinkoSolar Holding |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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