Correlation Between Enphase Energy and Large Cap
Can any of the company-specific risk be diversified away by investing in both Enphase Energy and Large Cap 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 Enphase Energy and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and Large Cap Value, you can compare the effects of market volatilities on Enphase Energy and Large Cap 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 Enphase Energy with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and Large Cap.
Diversification Opportunities for Enphase Energy and Large Cap
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enphase and Large is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value and Enphase 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 Enphase Energy are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Enphase Energy i.e., Enphase Energy and Large Cap go up and down completely randomly.
Pair Corralation between Enphase Energy and Large Cap
Given the investment horizon of 90 days Enphase Energy is expected to generate 8.76 times more return on investment than Large Cap. However, Enphase Energy is 8.76 times more volatile than Large Cap Value. It trades about 0.02 of its potential returns per unit of risk. Large Cap Value is currently generating about 0.14 per unit of risk. If you would invest 3,924 in Enphase Energy on May 29, 2025 and sell it today you would lose (128.00) from holding Enphase Energy or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. Large Cap Value
Performance |
| Timeline |
| Enphase Energy |
| Large Cap Value |
Enphase Energy and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and Large Cap
The main advantage of trading using opposite Enphase Energy and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Enphase Energy vs. SolarEdge Technologies | Enphase Energy vs. First Solar | Enphase Energy vs. Sunrun Inc | Enphase Energy vs. Canadian Solar |
| Large Cap vs. Needham Aggressive Growth | Large Cap vs. Artisan Small Cap | Large Cap vs. Auer Growth Fund | Large Cap vs. Qs Moderate Growth |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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