Correlation Between SPI Energy and Sunworks

Can any of the company-specific risk be diversified away by investing in both SPI 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 SPI Energy and Sunworks 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 Sunworks, you can compare the effects of market volatilities on SPI 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 SPI Energy with a short position of Sunworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPI Energy and Sunworks.

Diversification Opportunities for SPI Energy and Sunworks

0.05

Correlation Coefficient

SPI Energy  Sunworks

Significant diversification

The 3 months correlation between SPI and Sunworks is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SPI Energy Co and Sunworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunworks 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 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 SPI Energy i.e., SPI Energy and Sunworks go up and down completely randomly.

Pair Corralation between SPI Energy and Sunworks

If you would invest  32.00  in SPI Energy Co on September 5, 2024 and sell it today you would lose (1.00) from holding SPI Energy Co or give up 3.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

SPI Energy Co  vs.  Sunworks

SPI Energy

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPI Energy Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, SPI Energy demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Sunworks

Risk-Adjusted Performance

0 of 100

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 SPI Energy and Sunworks

The main advantage of trading using opposite SPI Energy and Sunworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPI 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 SPI Energy Co 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.