Correlation Between Sunrun and FormFactor
Can any of the company-specific risk be diversified away by investing in both Sunrun and FormFactor 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 Sunrun and FormFactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and FormFactor, you can compare the effects of market volatilities on Sunrun and FormFactor 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 Sunrun with a short position of FormFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and FormFactor.
Diversification Opportunities for Sunrun and FormFactor
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunrun and FormFactor is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and Sunrun 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 Sunrun Inc are associated (or correlated) with FormFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormFactor has no effect on the direction of Sunrun i.e., Sunrun and FormFactor go up and down completely randomly.
Pair Corralation between Sunrun and FormFactor
Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the FormFactor. But the stock apears to be less risky and, when comparing its historical volatility, Sunrun Inc is 1.23 times less risky than FormFactor. The stock trades about -0.18 of its potential returns per unit of risk. The FormFactor is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 3,790 in FormFactor on November 29, 2024 and sell it today you would lose (363.00) from holding FormFactor or give up 9.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrun Inc vs. FormFactor
Performance |
| Timeline |
| Sunrun Inc |
| FormFactor |
Sunrun and FormFactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and FormFactor
The main advantage of trading using opposite Sunrun and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, FormFactor 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 FormFactor will offset losses from the drop in FormFactor's long position.| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
| FormFactor vs. Silicon Laboratories | FormFactor vs. Diodes Incorporated | FormFactor vs. MACOM Technology Solutions | FormFactor vs. Amkor Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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