Correlation Between Sunrun and SunHydrogen
Can any of the company-specific risk be diversified away by investing in both Sunrun and SunHydrogen 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 SunHydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and SunHydrogen, you can compare the effects of market volatilities on Sunrun and SunHydrogen 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 SunHydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and SunHydrogen.
Diversification Opportunities for Sunrun and SunHydrogen
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunrun and SunHydrogen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and SunHydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunHydrogen 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 SunHydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunHydrogen has no effect on the direction of Sunrun i.e., Sunrun and SunHydrogen go up and down completely randomly.
Pair Corralation between Sunrun and SunHydrogen
Considering the 90-day investment horizon Sunrun is expected to generate 14.01 times less return on investment than SunHydrogen. But when comparing it to its historical volatility, Sunrun Inc is 1.31 times less risky than SunHydrogen. It trades about 0.0 of its potential returns per unit of risk. SunHydrogen is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.80 in SunHydrogen on September 1, 2024 and sell it today you would earn a total of 0.20 from holding SunHydrogen or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrun Inc vs. SunHydrogen
Performance |
| Timeline |
| Sunrun Inc |
| SunHydrogen |
Sunrun and SunHydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and SunHydrogen
The main advantage of trading using opposite Sunrun and SunHydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, SunHydrogen 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 SunHydrogen will offset losses from the drop in SunHydrogen's long position.| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
| SunHydrogen vs. Enerkon Solar International | SunHydrogen vs. Ascent Solar Technologies, | SunHydrogen vs. Solar Integrated Roofing | SunHydrogen vs. mPhase Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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