Correlation Between Sunnova Energy and Sunworks
Can any of the company-specific risk be diversified away by investing in both Sunnova Energy and Sunworks 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 Sunworks 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 Sunworks, you can compare the effects of market volatilities on Sunnova Energy and Sunworks 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 Sunworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunnova Energy and Sunworks.
Diversification Opportunities for Sunnova Energy and Sunworks
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunnova and Sunworks is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sunnova Energy International and Sunworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunworks 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 Sunworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunworks has no effect on the direction of Sunnova Energy i.e., Sunnova Energy and Sunworks go up and down completely randomly.
Pair Corralation between Sunnova Energy and Sunworks
If you would invest 538.00 in Sunnova Energy International on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Sunnova Energy International or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Sunnova Energy International vs. Sunworks
Performance |
| Timeline |
| Sunnova Energy Inter |
| Sunworks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sunnova Energy and Sunworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunnova Energy and Sunworks
The main advantage of trading using opposite Sunnova Energy and Sunworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunnova Energy position performs unexpectedly, Sunworks 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 Sunworks will offset losses from the drop in Sunworks' long position.| Sunnova Energy vs. Emeren Group | Sunnova Energy vs. Tigo Energy | Sunnova Energy vs. Sunrun Inc | Sunnova Energy vs. JinkoSolar Holding |
| Sunworks vs. Sunrun Inc | Sunworks vs. Maxeon Solar Technologies | Sunworks vs. Canadian Solar | Sunworks vs. First Solar |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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