Correlation Between Sunrun and Emeren
Can any of the company-specific risk be diversified away by investing in both Sunrun and Emeren 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 Emeren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrun Inc and Emeren Group, you can compare the effects of market volatilities on Sunrun and Emeren 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 Emeren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrun and Emeren.
Diversification Opportunities for Sunrun and Emeren
Very weak diversification
The 3 months correlation between Sunrun and Emeren is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sunrun Inc and Emeren Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emeren Group 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 Emeren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emeren Group has no effect on the direction of Sunrun i.e., Sunrun and Emeren go up and down completely randomly.
Pair Corralation between Sunrun and Emeren
Considering the 90-day investment horizon Sunrun Inc is expected to under-perform the Emeren. In addition to that, Sunrun is 1.18 times more volatile than Emeren Group. It trades about -0.16 of its total potential returns per unit of risk. Emeren Group is currently generating about -0.07 per unit of volatility. If you would invest 197.00 in Emeren Group on December 1, 2024 and sell it today you would lose (33.00) from holding Emeren Group or give up 16.75% 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. Emeren Group
Performance |
Timeline |
Sunrun Inc |
Emeren Group |
Sunrun and Emeren Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sunrun and Emeren
The main advantage of trading using opposite Sunrun and Emeren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrun position performs unexpectedly, Emeren 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 Emeren will offset losses from the drop in Emeren's long position.Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
Emeren vs. Canadian Solar | Emeren vs. Maxeon Solar Technologies | Emeren vs. SolarEdge Technologies | Emeren vs. Sunnova Energy International |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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