Correlation Between Sunworks and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both Sunworks and SolarEdge Technologies 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 SolarEdge Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunworks and SolarEdge Technologies, you can compare the effects of market volatilities on Sunworks and SolarEdge Technologies 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 SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunworks and SolarEdge Technologies.
Diversification Opportunities for Sunworks and SolarEdge Technologies
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunworks and SolarEdge is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sunworks and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge Technologies 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 SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of Sunworks i.e., Sunworks and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between Sunworks and SolarEdge Technologies
Given the investment horizon of 90 days Sunworks is expected to generate 1.23 times more return on investment than SolarEdge Technologies. However, Sunworks is 1.23 times more volatile than SolarEdge Technologies. It trades about -0.01 of its potential returns per unit of risk. SolarEdge Technologies is currently generating about -0.1 per unit of risk. If you would invest 223.00 in Sunworks on September 2, 2024 and sell it today you would lose (61.00) from holding Sunworks or give up 27.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.05% |
| Values | Daily Returns |
Sunworks vs. SolarEdge Technologies
Performance |
| Timeline |
| Sunworks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SolarEdge Technologies |
Sunworks and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunworks and SolarEdge Technologies
The main advantage of trading using opposite Sunworks and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunworks position performs unexpectedly, SolarEdge Technologies 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 SolarEdge Technologies will offset losses from the drop in SolarEdge Technologies' long position.| Sunworks vs. Sunrun Inc | Sunworks vs. Maxeon Solar Technologies | Sunworks vs. Canadian Solar | Sunworks vs. First Solar |
| SolarEdge Technologies vs. First Solar | SolarEdge Technologies vs. Sunrun Inc | SolarEdge Technologies vs. Canadian Solar | SolarEdge Technologies vs. Enphase Energy |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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