Correlation Between SunHydrogen and Nextracker
Can any of the company-specific risk be diversified away by investing in both SunHydrogen and Nextracker 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 SunHydrogen and Nextracker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunHydrogen and Nextracker Class A, you can compare the effects of market volatilities on SunHydrogen and Nextracker 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 SunHydrogen with a short position of Nextracker. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunHydrogen and Nextracker.
Diversification Opportunities for SunHydrogen and Nextracker
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SunHydrogen and Nextracker is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SunHydrogen and Nextracker Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextracker Class A and SunHydrogen 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 SunHydrogen are associated (or correlated) with Nextracker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextracker Class A has no effect on the direction of SunHydrogen i.e., SunHydrogen and Nextracker go up and down completely randomly.
Pair Corralation between SunHydrogen and Nextracker
Given the investment horizon of 90 days SunHydrogen is expected to under-perform the Nextracker. But the pink sheet apears to be less risky and, when comparing its historical volatility, SunHydrogen is 1.33 times less risky than Nextracker. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Nextracker Class A is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,197 in Nextracker Class A on August 31, 2024 and sell it today you would earn a total of 619.00 from holding Nextracker Class A or generate 19.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SunHydrogen vs. Nextracker Class A
Performance |
| Timeline |
| SunHydrogen |
| Nextracker Class A |
SunHydrogen and Nextracker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunHydrogen and Nextracker
The main advantage of trading using opposite SunHydrogen and Nextracker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunHydrogen position performs unexpectedly, Nextracker 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 Nextracker will offset losses from the drop in Nextracker's long position.| SunHydrogen vs. Enerkon Solar International | SunHydrogen vs. Ascent Solar Technologies, | SunHydrogen vs. Solar Integrated Roofing | SunHydrogen vs. mPhase Technologies |
| Nextracker vs. Braskem SA Class | Nextracker vs. Luxfer Holdings PLC | Nextracker vs. Sealed Air | Nextracker vs. Axalta Coating Systems |
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.
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