Correlation Between SunHydrogen and SunPower
Can any of the company-specific risk be diversified away by investing in both SunHydrogen and SunPower 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 SunPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunHydrogen and SunPower, you can compare the effects of market volatilities on SunHydrogen and SunPower 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 SunPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunHydrogen and SunPower.
Diversification Opportunities for SunHydrogen and SunPower
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SunHydrogen and SunPower is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SunHydrogen and SunPower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunPower 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 SunPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunPower has no effect on the direction of SunHydrogen i.e., SunHydrogen and SunPower go up and down completely randomly.
Pair Corralation between SunHydrogen and SunPower
Given the investment horizon of 90 days SunHydrogen is expected to generate 0.65 times more return on investment than SunPower. However, SunHydrogen is 1.53 times less risky than SunPower. It trades about 0.04 of its potential returns per unit of risk. SunPower is currently generating about -0.12 per unit of risk. If you would invest 1.80 in SunHydrogen on September 1, 2024 and sell it today you would earn a total of 0.20 from holding SunHydrogen or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.99% |
| Values | Daily Returns |
SunHydrogen vs. SunPower
Performance |
| Timeline |
| SunHydrogen |
| SunPower |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SunHydrogen and SunPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunHydrogen and SunPower
The main advantage of trading using opposite SunHydrogen and SunPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunHydrogen position performs unexpectedly, SunPower 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 SunPower will offset losses from the drop in SunPower's long position.| SunHydrogen vs. Enerkon Solar International | SunHydrogen vs. Ascent Solar Technologies, | SunHydrogen vs. Solar Integrated Roofing | SunHydrogen vs. mPhase Technologies |
| SunPower vs. Enphase Energy | SunPower vs. First Solar | SunPower vs. Sunnova Energy International | SunPower 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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