Correlation Between Sunrun and Trinity Industries
Can any of the company-specific risk be diversified away by investing in both Sunrun and Trinity 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 Trinity 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 Trinity Industries, you can compare the effects of market volatilities on Sunrun and Trinity 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 Trinity Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Trinity Industries.
Diversification Opportunities for Sunrun and Trinity Industries
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunrun and Trinity is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Trinity Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity 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 Trinity Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Industries has no effect on the direction of Sunrun i.e., Sunrun and Trinity Industries go up and down completely randomly.
Pair Corralation between Sunrun and Trinity Industries
Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the Trinity Industries. In addition to that, Sunrun is 2.42 times more volatile than Trinity Industries. It trades about -0.01 of its total potential returns per unit of risk. Trinity Industries is currently generating about 0.07 per unit of volatility. If you would invest 2,146 in Trinity Industries on November 1, 2024 and sell it today you would earn a total of 1,684 from holding Trinity Industries or generate 78.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrun Inc vs. Trinity Industries
Performance |
| Timeline |
| Sunrun Inc |
| Trinity Industries |
Sunrun and Trinity Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrun and Trinity Industries
The main advantage of trading using opposite Sunrun and Trinity Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Trinity 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 Trinity Industries will offset losses from the drop in Trinity Industries' long position.| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
| Trinity Industries vs. LB Foster | Trinity Industries vs. Freightcar America | Trinity Industries vs. Westinghouse Air Brake | Trinity Industries vs. Norfolk Southern |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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