Correlation Between SUNation Energy and Custom Truck

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

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

Diversification Opportunities for SUNation Energy and Custom Truck

-0.58

Correlation Coefficient

SUNation Energy  Custom Truck

Excellent diversification

The 3 months correlation between SUNation and Custom is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SUNation Energy and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One and SUNation 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 SUNation Energy are associated (or correlated) with Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of SUNation Energy i.e., SUNation Energy and Custom Truck go up and down completely randomly.

Pair Corralation between SUNation Energy and Custom Truck

Given the investment horizon of 90 days SUNation Energy is expected to under-perform the Custom Truck. In addition to that, SUNation Energy is 1.28 times more volatile than Custom Truck One. It trades about -0.46 of its total potential returns per unit of risk. Custom Truck One is currently generating about 0.18 per unit of volatility. If you would invest  489.00  in Custom Truck One on October 26, 2024 and sell it today you would earn a total of  45.00  from holding Custom Truck One or generate 9.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

SUNation Energy  vs.  Custom Truck One

SUNation Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUNation Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Custom Truck One

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Custom Truck unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SUNation Energy and Custom Truck

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

The idea behind SUNation Energy and Custom Truck One 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 Commodity Directory module to find actively traded commodities issued by global exchanges.