Correlation Between Sunnova Energy and Solar Integrated
Can any of the company-specific risk be diversified away by investing in both Sunnova Energy and Solar Integrated 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 Solar Integrated 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 Solar Integrated Roofing, you can compare the effects of market volatilities on Sunnova Energy and Solar Integrated 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 Solar Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunnova Energy and Solar Integrated.
Diversification Opportunities for Sunnova Energy and Solar Integrated
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunnova and Solar is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sunnova Energy International and Solar Integrated Roofing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Integrated Roofing 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 Solar Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Integrated Roofing has no effect on the direction of Sunnova Energy i.e., Sunnova Energy and Solar Integrated go up and down completely randomly.
Pair Corralation between Sunnova Energy and Solar Integrated
Given the investment horizon of 90 days Sunnova Energy International is expected to under-perform the Solar Integrated. But the stock apears to be less risky and, when comparing its historical volatility, Sunnova Energy International is 3.87 times less risky than Solar Integrated. The stock trades about -0.01 of its potential returns per unit of risk. The Solar Integrated Roofing is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,602 in Solar Integrated Roofing on September 3, 2024 and sell it today you would lose (1,602) from holding Solar Integrated Roofing or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sunnova Energy International vs. Solar Integrated Roofing
Performance |
| Timeline |
| Sunnova Energy Inter |
| Solar Integrated Roofing |
Sunnova Energy and Solar Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunnova Energy and Solar Integrated
The main advantage of trading using opposite Sunnova Energy and Solar Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunnova Energy position performs unexpectedly, Solar Integrated 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 Solar Integrated will offset losses from the drop in Solar Integrated's long position.| Sunnova Energy vs. Enphase Energy | Sunnova Energy vs. First Solar | Sunnova Energy vs. SolarEdge Technologies | Sunnova Energy vs. JinkoSolar Holding |
| Solar Integrated vs. Newhydrogen | Solar Integrated vs. Ascent Solar Technologies, | Solar Integrated vs. SinglePoint | Solar Integrated vs. TGI Solar Power |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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