Correlation Between Sunnova Energy and SPI Energy
Can any of the company-specific risk be diversified away by investing in both Sunnova Energy and SPI 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 Sunnova Energy and SPI Energy 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 SPI Energy Co, you can compare the effects of market volatilities on Sunnova Energy and SPI 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 Sunnova Energy with a short position of SPI Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunnova Energy and SPI Energy.
Diversification Opportunities for Sunnova Energy and SPI Energy
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunnova and SPI is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sunnova Energy International and SPI Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPI Energy 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 SPI Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPI Energy has no effect on the direction of Sunnova Energy i.e., Sunnova Energy and SPI Energy go up and down completely randomly.
Pair Corralation between Sunnova Energy and SPI Energy
Given the investment horizon of 90 days Sunnova Energy International is expected to generate 2.26 times more return on investment than SPI Energy. However, Sunnova Energy is 2.26 times more volatile than SPI Energy Co. It trades about 0.05 of its potential returns per unit of risk. SPI Energy Co is currently generating about -0.2 per unit of risk. If you would invest 502.00 in Sunnova Energy International on August 24, 2024 and sell it today you would lose (65.00) from holding Sunnova Energy International or give up 12.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunnova Energy International vs. SPI Energy Co
Performance |
| Timeline |
| Sunnova Energy Inter |
| SPI Energy |
Sunnova Energy and SPI Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunnova Energy and SPI Energy
The main advantage of trading using opposite Sunnova Energy and SPI Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunnova Energy position performs unexpectedly, SPI 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 SPI Energy will offset losses from the drop in SPI Energy's long position.| Sunnova Energy vs. Enphase Energy | Sunnova Energy vs. First Solar | Sunnova Energy vs. SolarEdge Technologies | Sunnova Energy vs. JinkoSolar Holding |
| SPI Energy vs. Ascent Solar Technologies, | SPI Energy vs. Emeren Group | SPI Energy vs. Sunrun Inc | SPI Energy vs. Sunnova Energy International |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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