Correlation Between Sunnova Energy and Emeren
Can any of the company-specific risk be diversified away by investing in both Sunnova Energy and Emeren 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 Emeren 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 Emeren Group, you can compare the effects of market volatilities on Sunnova Energy and Emeren 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 Emeren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunnova Energy and Emeren.
Diversification Opportunities for Sunnova Energy and Emeren
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunnova and Emeren is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sunnova Energy International and Emeren Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emeren Group 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 Emeren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emeren Group has no effect on the direction of Sunnova Energy i.e., Sunnova Energy and Emeren go up and down completely randomly.
Pair Corralation between Sunnova Energy and Emeren
Given the investment horizon of 90 days Sunnova Energy International is expected to under-perform the Emeren. In addition to that, Sunnova Energy is 4.7 times more volatile than Emeren Group. It trades about -0.14 of its total potential returns per unit of risk. Emeren Group is currently generating about 0.08 per unit of volatility. If you would invest 157.00 in Emeren Group on March 31, 2025 and sell it today you would earn a total of 27.00 from holding Emeren Group or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.06% |
| Values | Daily Returns |
Sunnova Energy International vs. Emeren Group
Performance |
| Timeline |
| Sunnova Energy Inter |
| Emeren Group |
Sunnova Energy and Emeren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunnova Energy and Emeren
The main advantage of trading using opposite Sunnova Energy and Emeren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunnova Energy position performs unexpectedly, Emeren 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 Emeren will offset losses from the drop in Emeren's long position.| Sunnova Energy vs. Complete Solaria, | Sunnova Energy vs. Enphase Energy | Sunnova Energy vs. First Solar | Sunnova Energy vs. SolarEdge Technologies |
| Emeren vs. Canadian Solar | Emeren vs. Maxeon Solar Technologies | Emeren vs. Complete Solaria, | Emeren vs. SolarEdge Technologies |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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