Correlation Between Acm Research and Sunrun

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

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

Diversification Opportunities for Acm Research and Sunrun

-0.41

Correlation Coefficient

Acm Research  Sunrun

Very good diversification

The 3 months correlation between Acm and Sunrun is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Acm Research and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc and Acm Research 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 Acm Research 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 Acm Research i.e., Acm Research and Sunrun go up and down completely randomly.

Pair Corralation between Acm Research and Sunrun

Given the investment horizon of 90 days Acm Research is expected to under-perform the Sunrun. But the stock apears to be less risky and, when comparing its historical volatility, Acm Research is 1.31 times less risky than Sunrun. The stock trades about -0.13 of its potential returns per unit of risk. The Sunrun Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,229  in Sunrun Inc on March 11, 2024 and sell it today you would earn a total of  116.00  from holding Sunrun Inc or generate 9.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Acm Research  vs.  Sunrun Inc

Acm Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acm Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in July 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Sunrun Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sunrun Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Sunrun displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acm Research and Sunrun

The main advantage of trading using opposite Acm Research and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acm Research 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 Acm Research 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.