Correlation Between Sunrun and SPI Energy
Can any of the company-specific risk be diversified away by investing in both Sunrun and SPI Energy 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 SPI Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and SPI Energy Co, you can compare the effects of market volatilities on Sunrun and SPI Energy 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 SPI Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and SPI Energy.
Diversification Opportunities for Sunrun and SPI Energy
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunrun and SPI is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and SPI Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPI Energy 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 SPI Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPI Energy has no effect on the direction of Sunrun i.e., Sunrun and SPI Energy go up and down completely randomly.
Pair Corralation between Sunrun and SPI Energy
Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the SPI Energy. But the stock apears to be less risky and, when comparing its historical volatility, Sunrun Inc is 5.63 times less risky than SPI Energy. The stock trades about -0.04 of its potential returns per unit of risk. The SPI Energy Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 43.00 in SPI Energy Co on October 21, 2024 and sell it today you would lose (7.00) from holding SPI Energy Co or give up 16.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Sunrun Inc vs. SPI Energy Co
Performance |
| Timeline |
| Sunrun Inc |
| SPI Energy |
Sunrun and SPI Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and SPI Energy
The main advantage of trading using opposite Sunrun and SPI Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, SPI Energy 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 SPI Energy will offset losses from the drop in SPI Energy's long position.| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
| SPI Energy vs. Ascent Solar Technologies, | SPI Energy vs. Emeren Group | SPI Energy vs. Sunrun Inc | SPI Energy 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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