Correlation Between FARO Technologies and Sunrun
Can any of the company-specific risk be diversified away by investing in both FARO Technologies 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 FARO Technologies and Sunrun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARO Technologies and Sunrun Inc, you can compare the effects of market volatilities on FARO Technologies 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 FARO Technologies with a short position of Sunrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARO Technologies and Sunrun.
Diversification Opportunities for FARO Technologies and Sunrun
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FARO and Sunrun is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding FARO Technologies and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc and FARO Technologies 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 FARO 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 FARO Technologies i.e., FARO Technologies and Sunrun go up and down completely randomly.
Pair Corralation between FARO Technologies and Sunrun
Assuming the 90 days horizon FARO Technologies is expected to generate 1.41 times less return on investment than Sunrun. But when comparing it to its historical volatility, FARO Technologies is 2.18 times less risky than Sunrun. It trades about 0.03 of its potential returns per unit of risk. Sunrun Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 975.00 in Sunrun Inc on September 14, 2024 and sell it today you would lose (3.00) from holding Sunrun Inc or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARO Technologies vs. Sunrun Inc
Performance |
| Timeline |
| FARO Technologies |
| Sunrun Inc |
FARO Technologies and Sunrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARO Technologies and Sunrun
The main advantage of trading using opposite FARO Technologies and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARO Technologies 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.| FARO Technologies vs. HEXAGON AB ADR1 | FARO Technologies vs. Superior Plus Corp | FARO Technologies vs. SIVERS SEMICONDUCTORS AB | FARO Technologies vs. NorAm Drilling AS |
| Sunrun vs. CSSC Offshore Marine | Sunrun vs. Eidesvik Offshore ASA | Sunrun vs. EAT WELL INVESTMENT | Sunrun vs. PennantPark Investment |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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