Correlation Between Sunnova Energy and Sunworks

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

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

Diversification Opportunities for Sunnova Energy and Sunworks

0.0

Correlation Coefficient

Sunnova Energy  Sunworks

Pay attention - limited upside

The 3 months correlation between Sunnova and Sunworks is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sunnova Energy International and Sunworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunworks and Sunnova Energy 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 Sunnova Energy International are associated (or correlated) with Sunworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunworks has no effect on the direction of Sunnova Energy i.e., Sunnova Energy and Sunworks go up and down completely randomly.

Pair Corralation between Sunnova Energy and Sunworks

If you would invest (100.00) in Sunworks on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Sunworks or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sunnova Energy International  vs.  Sunworks

Sunnova Energy Inter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunnova Energy International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sunworks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunworks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sunworks is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sunnova Energy and Sunworks

The main advantage of trading using opposite Sunnova Energy and Sunworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunnova Energy position performs unexpectedly, Sunworks 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 Sunworks will offset losses from the drop in Sunworks' long position.

The idea behind Sunnova Energy International and Sunworks 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.