Correlation Between SunPower and SunHydrogen
Can any of the company-specific risk be diversified away by investing in both SunPower and SunHydrogen 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 SunPower and SunHydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunPower and SunHydrogen, you can compare the effects of market volatilities on SunPower and SunHydrogen 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 SunPower with a short position of SunHydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunPower and SunHydrogen.
Diversification Opportunities for SunPower and SunHydrogen
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SunPower and SunHydrogen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SunPower and SunHydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunHydrogen and SunPower 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 SunPower are associated (or correlated) with SunHydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunHydrogen has no effect on the direction of SunPower i.e., SunPower and SunHydrogen go up and down completely randomly.
Pair Corralation between SunPower and SunHydrogen
Given the investment horizon of 90 days SunPower is expected to under-perform the SunHydrogen. In addition to that, SunPower is 1.53 times more volatile than SunHydrogen. It trades about -0.12 of its total potential returns per unit of risk. SunHydrogen is currently generating about 0.04 per unit of volatility. If you would invest 1.80 in SunHydrogen on September 1, 2024 and sell it today you would earn a total of 0.20 from holding SunHydrogen or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.99% |
| Values | Daily Returns |
SunPower vs. SunHydrogen
Performance |
| Timeline |
| SunPower |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SunHydrogen |
SunPower and SunHydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunPower and SunHydrogen
The main advantage of trading using opposite SunPower and SunHydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunPower position performs unexpectedly, SunHydrogen 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 SunHydrogen will offset losses from the drop in SunHydrogen's long position.| SunPower vs. Enphase Energy | SunPower vs. First Solar | SunPower vs. Sunnova Energy International | SunPower vs. SolarEdge Technologies |
| SunHydrogen vs. Enerkon Solar International | SunHydrogen vs. Ascent Solar Technologies, | SunHydrogen vs. Solar Integrated Roofing | SunHydrogen vs. mPhase Technologies |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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