Correlation Between ISun and SunHydrogen

Can any of the company-specific risk be diversified away by investing in both ISun 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 ISun and SunHydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ISun Inc and SunHydrogen, you can compare the effects of market volatilities on ISun 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 ISun with a short position of SunHydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISun and SunHydrogen.

Diversification Opportunities for ISun and SunHydrogen

-0.71

Correlation Coefficient

ISun  SunHydrogen

Pay attention - limited upside

The 3 months correlation between ISun and SunHydrogen is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ISun Inc and SunHydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunHydrogen and ISun 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 ISun Inc 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 ISun i.e., ISun and SunHydrogen go up and down completely randomly.

Pair Corralation between ISun and SunHydrogen

If you would invest  2.80  in SunHydrogen on October 20, 2024 and sell it today you would earn a total of  0.29  from holding SunHydrogen or generate 10.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

ISun Inc  vs.  SunHydrogen

ISun Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ISun Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ISun is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

SunHydrogen

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SunHydrogen are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, SunHydrogen reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ISun and SunHydrogen

The main advantage of trading using opposite ISun and SunHydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISun 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.

The idea behind ISun Inc and SunHydrogen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.