Correlation Between SPI Energy and Nextracker
Can any of the company-specific risk be diversified away by investing in both SPI Energy and Nextracker 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 SPI Energy and Nextracker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPI Energy Co and Nextracker Class A, you can compare the effects of market volatilities on SPI Energy and Nextracker 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 SPI Energy with a short position of Nextracker. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPI Energy and Nextracker.
Diversification Opportunities for SPI Energy and Nextracker
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPI and Nextracker is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SPI Energy Co and Nextracker Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextracker Class A and SPI Energy 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 SPI Energy Co are associated (or correlated) with Nextracker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextracker Class A has no effect on the direction of SPI Energy i.e., SPI Energy and Nextracker go up and down completely randomly.
Pair Corralation between SPI Energy and Nextracker
Considering the 90-day investment horizon SPI Energy Co is expected to under-perform the Nextracker. In addition to that, SPI Energy is 1.79 times more volatile than Nextracker Class A. It trades about -0.04 of its total potential returns per unit of risk. Nextracker Class A is currently generating about 0.02 per unit of volatility. If you would invest 4,029 in Nextracker Class A on September 1, 2024 and sell it today you would lose (58.00) from holding Nextracker Class A or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPI Energy Co vs. Nextracker Class A
Performance |
| Timeline |
| SPI Energy |
| Nextracker Class A |
SPI Energy and Nextracker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPI Energy and Nextracker
The main advantage of trading using opposite SPI Energy and Nextracker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPI Energy position performs unexpectedly, Nextracker 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 Nextracker will offset losses from the drop in Nextracker's long position.| SPI Energy vs. Ascent Solar Technologies, | SPI Energy vs. Emeren Group | SPI Energy vs. Sunrun Inc | SPI Energy vs. Sunnova Energy International |
| Nextracker vs. Vast Renewables Limited | Nextracker vs. 1847 Holdings LLC | Nextracker vs. Westport Fuel Systems | Nextracker vs. Falcons Beyond Global, |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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