Correlation Between Sunnova Energy and United States
Can any of the company-specific risk be diversified away by investing in both Sunnova Energy and United States 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 United States 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 United States Cellular, you can compare the effects of market volatilities on Sunnova Energy and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunnova Energy and United States.
Diversification Opportunities for Sunnova Energy and United States
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sunnova and United is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sunnova Energy International and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of Sunnova Energy i.e., Sunnova Energy and United States go up and down completely randomly.
Pair Corralation between Sunnova Energy and United States
Given the investment horizon of 90 days Sunnova Energy International is expected to generate 24.66 times more return on investment than United States. However, Sunnova Energy is 24.66 times more volatile than United States Cellular. It trades about 0.09 of its potential returns per unit of risk. United States Cellular is currently generating about 0.09 per unit of risk. If you would invest 535.00 in Sunnova Energy International on August 28, 2024 and sell it today you would lose (1.00) from holding Sunnova Energy International or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunnova Energy International vs. United States Cellular
Performance |
| Timeline |
| Sunnova Energy Inter |
| United States Cellular |
Sunnova Energy and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunnova Energy and United States
The main advantage of trading using opposite Sunnova Energy and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunnova Energy position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Sunnova Energy vs. Enphase Energy | Sunnova Energy vs. First Solar | Sunnova Energy vs. SolarEdge Technologies | Sunnova Energy vs. JinkoSolar Holding |
| United States vs. United States Cellular | United States vs. United States Cellular | United States vs. Office Properties Income | United States vs. Southern Company Series |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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