Correlation Between Zeo Energy and Sunrun

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

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

Diversification Opportunities for Zeo Energy and Sunrun

-0.45

Correlation Coefficient

Zeo Energy  Sunrun

Very good diversification

The 3 months correlation between Zeo and Sunrun is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Zeo Energy Corp and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc and Zeo 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 Zeo Energy Corp 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 Zeo Energy i.e., Zeo Energy and Sunrun go up and down completely randomly.

Pair Corralation between Zeo Energy and Sunrun

Considering the 90-day investment horizon Zeo Energy Corp is expected to generate 3.96 times more return on investment than Sunrun. However, Zeo Energy is 3.96 times more volatile than Sunrun Inc. It trades about 0.24 of its potential returns per unit of risk. Sunrun Inc is currently generating about -0.14 per unit of risk. If you would invest  205.00  in Zeo Energy Corp on October 23, 2024 and sell it today you would earn a total of  125.00  from holding Zeo Energy Corp or generate 60.98% return on investment over 90 days.

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

Zeo Energy Corp  vs.  Sunrun Inc

Zeo Energy Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zeo Energy Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Zeo Energy displayed 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 Zeo Energy and Sunrun

The main advantage of trading using opposite Zeo Energy and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeo Energy 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 Zeo Energy Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.