Correlation Between Sunnova Energy and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both Sunnova Energy and Advanced Micro 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 Sunnova Energy and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunnova Energy International and Advanced Micro Devices, you can compare the effects of market volatilities on Sunnova Energy and Advanced Micro 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 Sunnova Energy with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunnova Energy and Advanced Micro.
Diversification Opportunities for Sunnova Energy and Advanced Micro
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunnova and Advanced is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sunnova Energy International and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and Sunnova 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 Sunnova Energy International are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Sunnova Energy i.e., Sunnova Energy and Advanced Micro go up and down completely randomly.
Pair Corralation between Sunnova Energy and Advanced Micro
Given the investment horizon of 90 days Sunnova Energy International is expected to under-perform the Advanced Micro. In addition to that, Sunnova Energy is 2.21 times more volatile than Advanced Micro Devices. It trades about -0.15 of its total potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.19 per unit of volatility. If you would invest 18,334 in Advanced Micro Devices on January 31, 2024 and sell it today you would lose (2,314) from holding Advanced Micro Devices or give up 12.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sunnova Energy International vs. Advanced Micro Devices
Performance |
Timeline |
Sunnova Energy Inter |
Advanced Micro Devices |
Sunnova Energy and Advanced Micro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sunnova Energy and Advanced Micro
The main advantage of trading using opposite Sunnova Energy and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunnova Energy position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.Sunnova Energy vs. iSun Inc | Sunnova Energy vs. Emeren Group | Sunnova Energy vs. Tigo Energy | Sunnova Energy vs. SunPower |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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