Correlation Between VivoPower International and Solar Alliance
Can any of the company-specific risk be diversified away by investing in both VivoPower International 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 VivoPower International and Solar Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VivoPower International PLC and Solar Alliance Energy, you can compare the effects of market volatilities on VivoPower International 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 VivoPower International with a short position of Solar Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Solar Alliance.
Diversification Opportunities for VivoPower International and Solar Alliance
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VivoPower and Solar is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC 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 VivoPower International 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 VivoPower International PLC 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 VivoPower International i.e., VivoPower International and Solar Alliance go up and down completely randomly.
Pair Corralation between VivoPower International and Solar Alliance
Given the investment horizon of 90 days VivoPower International PLC is expected to generate 3.1 times more return on investment than Solar Alliance. However, VivoPower International is 3.1 times more volatile than Solar Alliance Energy. It trades about 0.17 of its potential returns per unit of risk. Solar Alliance Energy is currently generating about -0.14 per unit of risk. If you would invest 84.00 in VivoPower International PLC on September 3, 2024 and sell it today you would earn a total of 34.00 from holding VivoPower International PLC or generate 40.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VivoPower International PLC vs. Solar Alliance Energy
Performance |
| Timeline |
| VivoPower International |
| Solar Alliance Energy |
VivoPower International and Solar Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VivoPower International and Solar Alliance
The main advantage of trading using opposite VivoPower International and Solar Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International 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.| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
| Solar Alliance vs. Aurora Solar Technologies | Solar Alliance vs. Cryptoblox Technologies | Solar Alliance vs. Sun Pacific Holding | Solar Alliance vs. Solar Integrated Roofing |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |