Correlation Between Sunnova Energy and Georgia Power
Can any of the company-specific risk be diversified away by investing in both Sunnova Energy and Georgia Power 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 Sunnova Energy and Georgia Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunnova Energy International and Georgia Power Co, you can compare the effects of market volatilities on Sunnova Energy and Georgia Power 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 Sunnova Energy with a short position of Georgia Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunnova Energy and Georgia Power.
Diversification Opportunities for Sunnova Energy and Georgia Power
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunnova and Georgia is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sunnova Energy International and Georgia Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Georgia Power and Sunnova 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 Sunnova Energy International are associated (or correlated) with Georgia Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Georgia Power has no effect on the direction of Sunnova Energy i.e., Sunnova Energy and Georgia Power go up and down completely randomly.
Pair Corralation between Sunnova Energy and Georgia Power
Given the investment horizon of 90 days Sunnova Energy International is expected to under-perform the Georgia Power. In addition to that, Sunnova Energy is 4.89 times more volatile than Georgia Power Co. It trades about -0.3 of its total potential returns per unit of risk. Georgia Power Co is currently generating about 0.17 per unit of volatility. If you would invest 2,219 in Georgia Power Co on November 3, 2024 and sell it today you would earn a total of 102.00 from holding Georgia Power Co or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sunnova Energy International vs. Georgia Power Co
Performance |
| Timeline |
| Sunnova Energy Inter |
| Georgia Power |
Sunnova Energy and Georgia Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunnova Energy and Georgia Power
The main advantage of trading using opposite Sunnova Energy and Georgia Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunnova Energy position performs unexpectedly, Georgia Power 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 Georgia Power will offset losses from the drop in Georgia Power's long position.| Sunnova Energy vs. Enphase Energy | Sunnova Energy vs. First Solar | Sunnova Energy vs. SolarEdge Technologies | Sunnova Energy vs. JinkoSolar Holding |
| Georgia Power vs. Southern Co | Georgia Power vs. Entergy Arkansas LLC | Georgia Power vs. DTE Energy Co | Georgia Power vs. Entergy New Orleans |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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