Correlation Between Sunrun and Teradyne
Can any of the company-specific risk be diversified away by investing in both Sunrun and Teradyne 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 Teradyne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and Teradyne, you can compare the effects of market volatilities on Sunrun and Teradyne 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 Teradyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Teradyne.
Diversification Opportunities for Sunrun and Teradyne
Very poor diversification
The 3 months correlation between Sunrun and Teradyne is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Teradyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradyne 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 Teradyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradyne has no effect on the direction of Sunrun i.e., Sunrun and Teradyne go up and down completely randomly.
Pair Corralation between Sunrun and Teradyne
Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the Teradyne. In addition to that, Sunrun is 4.54 times more volatile than Teradyne. It trades about -0.09 of its total potential returns per unit of risk. Teradyne is currently generating about 0.09 per unit of volatility. If you would invest 10,637 in Teradyne on September 2, 2024 and sell it today you would earn a total of 363.00 from holding Teradyne or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrun Inc vs. Teradyne
Performance |
| Timeline |
| Sunrun Inc |
| Teradyne |
Sunrun and Teradyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and Teradyne
The main advantage of trading using opposite Sunrun and Teradyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Teradyne 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 Teradyne will offset losses from the drop in Teradyne's long position.| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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