Correlation Between Zeo Energy and SUNation Energy

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

Diversification Opportunities for Zeo Energy and SUNation Energy

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Zeo and SUNation is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Zeo Energy Corp and SUNation Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNation Energy 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 SUNation Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNation Energy has no effect on the direction of Zeo Energy i.e., Zeo Energy and SUNation Energy go up and down completely randomly.

Pair Corralation between Zeo Energy and SUNation Energy

Assuming the 90 days horizon Zeo Energy Corp is expected to generate 1.97 times more return on investment than SUNation Energy. However, Zeo Energy is 1.97 times more volatile than SUNation Energy. It trades about 0.09 of its potential returns per unit of risk. SUNation Energy is currently generating about -0.06 per unit of risk. If you would invest  11.00  in Zeo Energy Corp on October 10, 2024 and sell it today you would lose (2.00) from holding Zeo Energy Corp or give up 18.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy26.16%
ValuesDaily Returns

Zeo Energy Corp  vs.  SUNation Energy

 Performance 
       Timeline  
Zeo Energy Corp 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Zeo Energy Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Zeo Energy showed solid returns over the last few months and may actually be approaching a breakup point.
SUNation Energy 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 uncertain 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.

Zeo Energy and SUNation Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Zeo Energy and SUNation Energy

The main advantage of trading using opposite Zeo Energy and SUNation Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeo Energy position performs unexpectedly, SUNation 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 SUNation Energy will offset losses from the drop in SUNation Energy's long position.
The idea behind Zeo Energy Corp and SUNation 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.
Check out your portfolio center.
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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