Correlation Between Hawaiian Electric and SolarBank Common

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

By analyzing existing cross correlation between Hawaiian Electric Industries and SolarBank Common, you can compare the effects of market volatilities on Hawaiian Electric and SolarBank Common 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 Hawaiian Electric with a short position of SolarBank Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and SolarBank Common.

Diversification Opportunities for Hawaiian Electric and SolarBank Common

-0.45

Correlation Coefficient

Hawaiian Electric  SolarBank Common

Very good diversification

The 3 months correlation between Hawaiian and SolarBank is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and SolarBank Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarBank Common and Hawaiian Electric 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 Hawaiian Electric Industries are associated (or correlated) with SolarBank Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarBank Common has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and SolarBank Common go up and down completely randomly.

Pair Corralation between Hawaiian Electric and SolarBank Common

Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to generate 0.35 times more return on investment than SolarBank Common. However, Hawaiian Electric Industries is 2.86 times less risky than SolarBank Common. It trades about 0.06 of its potential returns per unit of risk. SolarBank Common is currently generating about -0.12 per unit of risk. If you would invest  1,034  in Hawaiian Electric Industries on May 6, 2025 and sell it today you would earn a total of  58.50  from holding Hawaiian Electric Industries or generate 5.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Hawaiian Electric Industries  vs.  SolarBank Common

Hawaiian Electric

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hawaiian Electric Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Hawaiian Electric may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SolarBank Common

Risk-Adjusted Performance

Very Weak

Over the last 90 days SolarBank Common 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 very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Hawaiian Electric and SolarBank Common

The main advantage of trading using opposite Hawaiian Electric and SolarBank Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, SolarBank Common 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 SolarBank Common will offset losses from the drop in SolarBank Common's long position.

The idea behind Hawaiian Electric Industries and SolarBank Common 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.