Correlation Between SPI Energy and Solar Alliance
Can any of the company-specific risk be diversified away by investing in both SPI Energy and Solar Alliance 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 Solar Alliance 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 Solar Alliance Energy, you can compare the effects of market volatilities on SPI Energy and Solar Alliance 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 Solar Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPI Energy and Solar Alliance.
Diversification Opportunities for SPI Energy and Solar Alliance
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPI and Solar is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SPI Energy Co and Solar Alliance Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Alliance Energy 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 Solar Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Alliance Energy has no effect on the direction of SPI Energy i.e., SPI Energy and Solar Alliance go up and down completely randomly.
Pair Corralation between SPI Energy and Solar Alliance
Considering the 90-day investment horizon SPI Energy Co is expected to under-perform the Solar Alliance. In addition to that, SPI Energy is 1.03 times more volatile than Solar Alliance Energy. It trades about -0.21 of its total potential returns per unit of risk. Solar Alliance Energy is currently generating about -0.12 per unit of volatility. If you would invest 3.08 in Solar Alliance Energy on August 31, 2024 and sell it today you would lose (0.57) from holding Solar Alliance Energy or give up 18.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPI Energy Co vs. Solar Alliance Energy
Performance |
| Timeline |
| SPI Energy |
| Solar Alliance Energy |
SPI Energy and Solar Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPI Energy and Solar Alliance
The main advantage of trading using opposite SPI Energy and Solar Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPI Energy position performs unexpectedly, Solar Alliance 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 Solar Alliance will offset losses from the drop in Solar Alliance'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 |
| Solar Alliance vs. Nextera Energy | Solar Alliance vs. Consumers Energy | Solar Alliance vs. Duke Energy | Solar Alliance vs. Centrais Electricas Brasileiras |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |