Correlation Between VivoPower International and Solar Integrated
Can any of the company-specific risk be diversified away by investing in both VivoPower International and Solar Integrated 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 Integrated 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 Integrated Roofing, you can compare the effects of market volatilities on VivoPower International and Solar Integrated 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 Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Solar Integrated.
Diversification Opportunities for VivoPower International and Solar Integrated
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between VivoPower and Solar is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Solar Integrated Roofing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Integrated Roofing 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 Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Integrated Roofing has no effect on the direction of VivoPower International i.e., VivoPower International and Solar Integrated go up and down completely randomly.
Pair Corralation between VivoPower International and Solar Integrated
Given the investment horizon of 90 days VivoPower International is expected to generate 1.67 times less return on investment than Solar Integrated. But when comparing it to its historical volatility, VivoPower International PLC is 2.34 times less risky than Solar Integrated. It trades about 0.15 of its potential returns per unit of risk. Solar Integrated Roofing is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Solar Integrated Roofing on August 28, 2024 and sell it today you would lose (0.01) from holding Solar Integrated Roofing or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VivoPower International PLC vs. Solar Integrated Roofing
Performance |
| Timeline |
| VivoPower International |
| Solar Integrated Roofing |
VivoPower International and Solar Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VivoPower International and Solar Integrated
The main advantage of trading using opposite VivoPower International and Solar Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International position performs unexpectedly, Solar Integrated 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 Integrated will offset losses from the drop in Solar Integrated'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 Integrated vs. Newhydrogen | Solar Integrated vs. Ascent Solar Technologies, | Solar Integrated vs. TGI Solar Power | Solar Integrated vs. Clear Blue 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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