Correlation Between Enphase Energy and Sitime
Can any of the company-specific risk be diversified away by investing in both Enphase Energy and Sitime 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 Sitime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and Sitime, you can compare the effects of market volatilities on Enphase Energy and Sitime 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 Sitime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and Sitime.
Diversification Opportunities for Enphase Energy and Sitime
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enphase and Sitime is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and Sitime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitime 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 Sitime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitime has no effect on the direction of Enphase Energy i.e., Enphase Energy and Sitime go up and down completely randomly.
Pair Corralation between Enphase Energy and Sitime
Given the investment horizon of 90 days Enphase Energy is expected to under-perform the Sitime. But the stock apears to be less risky and, when comparing its historical volatility, Enphase Energy is 1.08 times less risky than Sitime. The stock trades about -0.07 of its potential returns per unit of risk. The Sitime is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,250 in Sitime on August 27, 2024 and sell it today you would earn a total of 11,858 from holding Sitime or generate 128.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. Sitime
Performance |
| Timeline |
| Enphase Energy |
| Sitime |
Enphase Energy and Sitime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and Sitime
The main advantage of trading using opposite Enphase Energy and Sitime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy position performs unexpectedly, Sitime 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 Sitime will offset losses from the drop in Sitime's long position.| Enphase Energy vs. First Solar | Enphase Energy vs. Sunrun Inc | Enphase Energy vs. Canadian Solar | Enphase Energy vs. SolarEdge Technologies |
| Sitime vs. Lattice Semiconductor | Sitime vs. Qorvo Inc | Sitime vs. Microchip Technology | Sitime vs. Silicon Laboratories |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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