Correlation Between VivoPower International and Sunrun

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

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

Diversification Opportunities for VivoPower International and Sunrun

-0.53

Correlation Coefficient

VivoPower International  Sunrun

Excellent diversification

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

Pair Corralation between VivoPower International and Sunrun

Given the investment horizon of 90 days VivoPower International PLC is expected to under-perform the Sunrun. In addition to that, VivoPower International is 1.69 times more volatile than Sunrun Inc. It trades about -0.18 of its total potential returns per unit of risk. Sunrun Inc is currently generating about -0.14 per unit of volatility. If you would invest  1,010  in Sunrun Inc on October 23, 2024 and sell it today you would lose (114.50) from holding Sunrun Inc or give up 11.34% of portfolio value over 90 days.

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

VivoPower International PLC  vs.  Sunrun Inc

VivoPower International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VivoPower International reported solid returns over the last few months and may actually be approaching a breakup point.

Sunrun Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunrun Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with VivoPower International and Sunrun

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

The idea behind VivoPower International PLC and Sunrun 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.