Correlation Between SPI Energy and ISun

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

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

Diversification Opportunities for SPI Energy and ISun

0.0

Correlation Coefficient

SPI Energy  ISun

Pay attention - limited upside

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

Pair Corralation between SPI Energy and ISun

If you would invest  39.00  in SPI Energy Co on December 23, 2024 and sell it today you would lose (3.00) from holding SPI Energy Co or give up 7.69% of portfolio value over 90 days.

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

SPI Energy Co  vs.  ISun Inc

SPI Energy

Risk-Adjusted Performance

OK

Over the last 90 days SPI Energy Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unfluctuating basic indicators, SPI Energy demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ISun Inc

Risk-Adjusted Performance

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.

Pair Trading with SPI Energy and ISun

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

The idea behind SPI Energy Co and ISun 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.