Correlation Between Enphase Energy and Sunrun
Can any of the company-specific risk be diversified away by investing in both Enphase Energy 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 Enphase Energy and Sunrun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and Sunrun Inc, you can compare the effects of market volatilities on Enphase Energy 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 Enphase Energy with a short position of Sunrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and Sunrun.
Diversification Opportunities for Enphase Energy and Sunrun
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Enphase and Sunrun is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc 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 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 Enphase Energy i.e., Enphase Energy and Sunrun go up and down completely randomly.
Pair Corralation between Enphase Energy and Sunrun
Given the investment horizon of 90 days Enphase Energy is expected to generate 0.64 times more return on investment than Sunrun. However, Enphase Energy is 1.57 times less risky than Sunrun. It trades about -0.16 of its potential returns per unit of risk. Sunrun Inc is currently generating about -0.12 per unit of risk. If you would invest 7,847 in Enphase Energy on August 24, 2024 and sell it today you would lose (1,490) from holding Enphase Energy or give up 18.99% 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. Sunrun Inc
Performance |
| Timeline |
| Enphase Energy |
| Sunrun Inc |
Enphase Energy and Sunrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and Sunrun
The main advantage of trading using opposite Enphase Energy and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy 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.| Enphase Energy vs. First Solar | Enphase Energy vs. Sunrun Inc | Enphase Energy vs. Canadian Solar | Enphase Energy vs. SolarEdge Technologies |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |