Correlation Between Sunrun and Honeywell International
Can any of the company-specific risk be diversified away by investing in both Sunrun and Honeywell International 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 Honeywell International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and Honeywell International, you can compare the effects of market volatilities on Sunrun and Honeywell International 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 Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Honeywell International.
Diversification Opportunities for Sunrun and Honeywell International
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sunrun and Honeywell is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International 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 Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of Sunrun i.e., Sunrun and Honeywell International go up and down completely randomly.
Pair Corralation between Sunrun and Honeywell International
Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the Honeywell International. In addition to that, Sunrun is 6.14 times more volatile than Honeywell International. It trades about -0.08 of its total potential returns per unit of risk. Honeywell International is currently generating about 0.41 per unit of volatility. If you would invest 20,509 in Honeywell International on August 28, 2024 and sell it today you would earn a total of 2,551 from holding Honeywell International or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrun Inc vs. Honeywell International
Performance |
| Timeline |
| Sunrun Inc |
| Honeywell International |
Sunrun and Honeywell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and Honeywell International
The main advantage of trading using opposite Sunrun and Honeywell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Honeywell International 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 Honeywell International will offset losses from the drop in Honeywell International's long position.| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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