Correlation Between Sunworks and Tigo Energy

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Can any of the company-specific risk be diversified away by investing in both Sunworks and Tigo Energy 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 Sunworks and Tigo Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunworks and Tigo Energy, you can compare the effects of market volatilities on Sunworks and Tigo Energy 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 Sunworks with a short position of Tigo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunworks and Tigo Energy.

Diversification Opportunities for Sunworks and Tigo Energy

-0.53
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Sunworks and Tigo is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sunworks and Tigo Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tigo Energy and Sunworks 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 Sunworks are associated (or correlated) with Tigo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tigo Energy has no effect on the direction of Sunworks i.e., Sunworks and Tigo Energy go up and down completely randomly.

Pair Corralation between Sunworks and Tigo Energy

If you would invest  162.00  in Sunworks on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Sunworks or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy1.59%
ValuesDaily Returns

Sunworks  vs.  Tigo Energy

 Performance 
       Timeline  
Sunworks 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Tigo Energy 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Tigo Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Sunworks and Tigo Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sunworks and Tigo Energy

The main advantage of trading using opposite Sunworks and Tigo Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunworks position performs unexpectedly, Tigo Energy 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 Tigo Energy will offset losses from the drop in Tigo Energy's long position.
The idea behind Sunworks and Tigo Energy 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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