Correlation Between Sunrun and GCL Poly

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

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

Diversification Opportunities for Sunrun and GCL Poly

-0.14

Correlation Coefficient

Sunrun  GCL Poly

Good diversification

The 3 months correlation between Sunrun and GCL is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and GCL Poly Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCL Poly Energy and Sunrun 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 Sunrun Inc are associated (or correlated) with GCL Poly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCL Poly Energy has no effect on the direction of Sunrun i.e., Sunrun and GCL Poly go up and down completely randomly.

Pair Corralation between Sunrun and GCL Poly

Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the GCL Poly. But the stock apears to be less risky and, when comparing its historical volatility, Sunrun Inc is 2.2 times less risky than GCL Poly. The stock trades about -0.24 of its potential returns per unit of risk. The GCL Poly Energy Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  15.00  in GCL Poly Energy Holdings on December 5, 2024 and sell it today you would earn a total of  1.00  from holding GCL Poly Energy Holdings or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sunrun Inc  vs.  GCL Poly Energy Holdings

Sunrun Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunrun Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

GCL Poly Energy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GCL Poly Energy Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, GCL Poly reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sunrun and GCL Poly

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

The idea behind Sunrun Inc and GCL Poly Energy Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.