Correlation Between NYSE Composite and Sunnova Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Sunnova Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Sunnova Energy International, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Sunnova Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sunnova Energy.
Diversification Opportunities for NYSE Composite and Sunnova Energy
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Sunnova is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Sunnova Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Sunnova Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 8.83 times less return on investment than Sunnova Energy. But when comparing it to its historical volatility, NYSE Composite is 22.62 times less risky than Sunnova Energy. It trades about 0.24 of its potential returns per unit of risk. Sunnova Energy International is currently generating about 0.09 of returns per unit of risk over similar time horizon. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Sunnova Energy International
Performance |
| Timeline |
NYSE Composite and Sunnova Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sunnova Energy International
Pair trading matchups for Sunnova Energy
Pair Trading with NYSE Composite and Sunnova Energy
The main advantage of trading using opposite NYSE Composite and Sunnova Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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