Correlation Between Sunrun and Miller Industries
Can any of the company-specific risk be diversified away by investing in both Sunrun and Miller Industries 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 Miller Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and Miller Industries, you can compare the effects of market volatilities on Sunrun and Miller Industries 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 Miller Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Miller Industries.
Diversification Opportunities for Sunrun and Miller Industries
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sunrun and Miller is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Miller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Industries 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 Miller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Industries has no effect on the direction of Sunrun i.e., Sunrun and Miller Industries go up and down completely randomly.
Pair Corralation between Sunrun and Miller Industries
Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the Miller Industries. In addition to that, Sunrun is 2.62 times more volatile than Miller Industries. It trades about -0.02 of its total potential returns per unit of risk. Miller Industries is currently generating about 0.1 per unit of volatility. If you would invest 2,709 in Miller Industries on August 23, 2024 and sell it today you would earn a total of 4,016 from holding Miller Industries or generate 148.25% 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. Miller Industries
Performance |
| Timeline |
| Sunrun Inc |
| Miller Industries |
Sunrun and Miller Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and Miller Industries
The main advantage of trading using opposite Sunrun and Miller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Miller Industries 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 Miller Industries will offset losses from the drop in Miller Industries' long position.| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
| Miller Industries vs. Dorman Products | Miller Industries vs. Standard Motor Products | Miller Industries vs. Motorcar Parts of | Miller Industries vs. Douglas Dynamics |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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