Correlation Between Sunrun and Peraso

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

By analyzing existing cross correlation between Sunrun Inc and Peraso Inc, you can compare the effects of market volatilities on Sunrun and Peraso 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 Peraso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Peraso.

Diversification Opportunities for Sunrun and Peraso

0.49

Correlation Coefficient

Sunrun  Peraso

Very weak diversification

The 3 months correlation between Sunrun and Peraso is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Peraso Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peraso Inc 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 Peraso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peraso Inc has no effect on the direction of Sunrun i.e., Sunrun and Peraso go up and down completely randomly.

Pair Corralation between Sunrun and Peraso

Considering the 90-day investment horizon Sunrun Inc is expected to generate 0.8 times more return on investment than Peraso. However, Sunrun Inc is 1.25 times less risky than Peraso. It trades about -0.16 of its potential returns per unit of risk. Peraso Inc is currently generating about -0.14 per unit of risk. If you would invest  1,004  in Sunrun Inc on December 11, 2024 and sell it today you would lose (305.00) from holding Sunrun Inc or give up 30.38% of portfolio value over 90 days.

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

Sunrun Inc  vs.  Peraso Inc

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.

Peraso Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peraso Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Peraso may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sunrun and Peraso

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

The idea behind Sunrun Inc and Peraso Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.