Correlation Between GCL-Poly Energy and Enphase Energy
Can any of the company-specific risk be diversified away by investing in both GCL-Poly Energy and Enphase 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 GCL-Poly Energy and Enphase Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCL Poly Energy Holdings and Enphase Energy, you can compare the effects of market volatilities on GCL-Poly Energy and Enphase 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 GCL-Poly Energy with a short position of Enphase Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCL-Poly Energy and Enphase Energy.
Diversification Opportunities for GCL-Poly Energy and Enphase Energy
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GCL-Poly and Enphase is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding GCL Poly Energy Holdings and Enphase Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enphase Energy and GCL-Poly 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 GCL Poly Energy Holdings are associated (or correlated) with Enphase Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enphase Energy has no effect on the direction of GCL-Poly Energy i.e., GCL-Poly Energy and Enphase Energy go up and down completely randomly.
Pair Corralation between GCL-Poly Energy and Enphase Energy
Assuming the 90 days horizon GCL Poly Energy Holdings is expected to generate 0.89 times more return on investment than Enphase Energy. However, GCL Poly Energy Holdings is 1.12 times less risky than Enphase Energy. It trades about 0.32 of its potential returns per unit of risk. Enphase Energy is currently generating about -0.25 per unit of risk. If you would invest 13.00 in GCL Poly Energy Holdings on November 3, 2024 and sell it today you would earn a total of 2.00 from holding GCL Poly Energy Holdings or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GCL Poly Energy Holdings vs. Enphase Energy
Performance |
| Timeline |
| GCL Poly Energy |
| Enphase Energy |
GCL-Poly Energy and Enphase Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCL-Poly Energy and Enphase Energy
The main advantage of trading using opposite GCL-Poly Energy and Enphase Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCL-Poly Energy position performs unexpectedly, Enphase 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 Enphase Energy will offset losses from the drop in Enphase Energy's long position.| GCL-Poly Energy vs. SMA Solar Technology | GCL-Poly Energy vs. Xinyi Solar Holdings | GCL-Poly Energy vs. SMA Solar Technology | GCL-Poly Energy vs. Three Sixty Solar |
| Enphase Energy vs. First Solar | Enphase Energy vs. Sunrun Inc | Enphase Energy vs. Canadian Solar | Enphase Energy vs. SolarEdge Technologies |
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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