Correlation Between Sunrun and Solid Power
Can any of the company-specific risk be diversified away by investing in both Sunrun and Solid Power 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 Solid Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and Solid Power, you can compare the effects of market volatilities on Sunrun and Solid Power 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 Solid Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Solid Power.
Diversification Opportunities for Sunrun and Solid Power
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunrun and Solid is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power 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 Solid Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Power has no effect on the direction of Sunrun i.e., Sunrun and Solid Power go up and down completely randomly.
Pair Corralation between Sunrun and Solid Power
Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the Solid Power. But the stock apears to be less risky and, when comparing its historical volatility, Sunrun Inc is 2.42 times less risky than Solid Power. The stock trades about -0.04 of its potential returns per unit of risk. The Solid Power is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Solid Power on November 18, 2024 and sell it today you would earn a total of 0.00 from holding Solid Power or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrun Inc vs. Solid Power
Performance |
| Timeline |
| Sunrun Inc |
| Solid Power |
Sunrun and Solid Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and Solid Power
The main advantage of trading using opposite Sunrun and Solid Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Solid Power 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 Solid Power will offset losses from the drop in Solid Power's long position.| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
| Solid Power vs. Solid Power | Solid Power vs. EVgo Equity Warrants | Solid Power vs. Microvast Holdings | Solid Power vs. IONQ WT |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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