Correlation Between Complete Solaria, and Enphase Energy

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

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

Diversification Opportunities for Complete Solaria, and Enphase Energy

-0.63

Correlation Coefficient

Complete Solaria,  Enphase Energy

Excellent diversification

The 3 months correlation between Complete and Enphase is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Complete Solaria, and Enphase Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enphase Energy and Complete Solaria, 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 Complete Solaria, are associated (or correlated) with Enphase Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enphase Energy has no effect on the direction of Complete Solaria, i.e., Complete Solaria, and Enphase Energy go up and down completely randomly.

Pair Corralation between Complete Solaria, and Enphase Energy

Given the investment horizon of 90 days Complete Solaria, is expected to generate 1.33 times more return on investment than Enphase Energy. However, Complete Solaria, is 1.33 times more volatile than Enphase Energy. It trades about 0.09 of its potential returns per unit of risk. Enphase Energy is currently generating about -0.08 per unit of risk. If you would invest  159.00  in Complete Solaria, on February 17, 2025 and sell it today you would earn a total of  29.00  from holding Complete Solaria, or generate 18.24% return on investment over 90 days.

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

Complete Solaria,  vs.  Enphase Energy

Complete Solaria,

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Complete Solaria, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Complete Solaria, reported solid returns over the last few months and may actually be approaching a breakup point.

Enphase Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enphase Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Complete Solaria, and Enphase Energy

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

The idea behind Complete Solaria, and Enphase Energy 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 Global Correlations module to find global opportunities by holding instruments from different markets.