Correlation Between Sunworks and Newhydrogen
Can any of the company-specific risk be diversified away by investing in both Sunworks and Newhydrogen 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 Sunworks and Newhydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunworks and Newhydrogen, you can compare the effects of market volatilities on Sunworks and Newhydrogen 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 Sunworks with a short position of Newhydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunworks and Newhydrogen.
Diversification Opportunities for Sunworks and Newhydrogen
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunworks and Newhydrogen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sunworks and Newhydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newhydrogen and Sunworks 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 Sunworks are associated (or correlated) with Newhydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newhydrogen has no effect on the direction of Sunworks i.e., Sunworks and Newhydrogen go up and down completely randomly.
Pair Corralation between Sunworks and Newhydrogen
Given the investment horizon of 90 days Sunworks is expected to generate 1.19 times more return on investment than Newhydrogen. However, Sunworks is 1.19 times more volatile than Newhydrogen. It trades about 0.11 of its potential returns per unit of risk. Newhydrogen is currently generating about -0.03 per unit of risk. If you would invest 135.00 in Sunworks on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Sunworks or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.33% |
| Values | Daily Returns |
Sunworks vs. Newhydrogen
Performance |
| Timeline |
| Sunworks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Newhydrogen |
Sunworks and Newhydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunworks and Newhydrogen
The main advantage of trading using opposite Sunworks and Newhydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunworks position performs unexpectedly, Newhydrogen 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 Newhydrogen will offset losses from the drop in Newhydrogen's long position.| Sunworks vs. Sunrun Inc | Sunworks vs. Maxeon Solar Technologies | Sunworks vs. Canadian Solar | Sunworks vs. First Solar |
| Newhydrogen vs. Solar Integrated Roofing | Newhydrogen vs. Ascent Solar Technologies, | Newhydrogen vs. SinglePoint | Newhydrogen vs. SunHydrogen |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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