Correlation Between Sunrun and Micron Technology
Can any of the company-specific risk be diversified away by investing in both Sunrun and Micron Technology 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 Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and Micron Technology, you can compare the effects of market volatilities on Sunrun and Micron Technology 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 Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Micron Technology.
Diversification Opportunities for Sunrun and Micron Technology
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunrun and Micron is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology 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 Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of Sunrun i.e., Sunrun and Micron Technology go up and down completely randomly.
Pair Corralation between Sunrun and Micron Technology
Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the Micron Technology. In addition to that, Sunrun is 1.84 times more volatile than Micron Technology. It trades about -0.02 of its total potential returns per unit of risk. Micron Technology is currently generating about 0.05 per unit of volatility. If you would invest 6,237 in Micron Technology on October 24, 2024 and sell it today you would earn a total of 4,774 from holding Micron Technology or generate 76.54% 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. Micron Technology
Performance |
| Timeline |
| Sunrun Inc |
| Micron Technology |
Sunrun and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and Micron Technology
The main advantage of trading using opposite Sunrun and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
| Micron Technology vs. First Solar | Micron Technology vs. Sunrun Inc | Micron Technology vs. Canadian Solar | Micron Technology vs. SolarEdge 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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