Correlation Between Nextracker and Sunnova Energy
Can any of the company-specific risk be diversified away by investing in both Nextracker and Sunnova 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 Nextracker and Sunnova Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextracker Class A and Sunnova Energy International, you can compare the effects of market volatilities on Nextracker and Sunnova 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 Nextracker with a short position of Sunnova Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextracker and Sunnova Energy.
Diversification Opportunities for Nextracker and Sunnova Energy
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nextracker and Sunnova is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nextracker Class A and Sunnova Energy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunnova Energy Inter and Nextracker 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 Nextracker Class A are associated (or correlated) with Sunnova Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunnova Energy Inter has no effect on the direction of Nextracker i.e., Nextracker and Sunnova Energy go up and down completely randomly.
Pair Corralation between Nextracker and Sunnova Energy
Considering the 90-day investment horizon Nextracker Class A is expected to generate 0.45 times more return on investment than Sunnova Energy. However, Nextracker Class A is 2.23 times less risky than Sunnova Energy. It trades about 0.03 of its potential returns per unit of risk. Sunnova Energy International is currently generating about -0.06 per unit of risk. If you would invest 3,187 in Nextracker Class A on January 15, 2025 and sell it today you would earn a total of 886.50 from holding Nextracker Class A or generate 27.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Nextracker Class A vs. Sunnova Energy International
Performance |
| Timeline |
| Nextracker Class A |
| Sunnova Energy Inter |
Nextracker and Sunnova Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextracker and Sunnova Energy
The main advantage of trading using opposite Nextracker and Sunnova Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextracker position performs unexpectedly, Sunnova 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 Sunnova Energy will offset losses from the drop in Sunnova Energy's long position.| Nextracker vs. Ambev SA ADR | Nextracker vs. JD Sports Fashion | Nextracker vs. NetSol Technologies | Nextracker vs. Q2 Holdings |
| Sunnova Energy vs. Enphase Energy | Sunnova Energy vs. First Solar | Sunnova Energy vs. SolarEdge Technologies | Sunnova Energy vs. JinkoSolar Holding |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |