Correlation Between SUNation Energy and Hexcel

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

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

Diversification Opportunities for SUNation Energy and Hexcel

-0.34

Correlation Coefficient

SUNation Energy  Hexcel

Very good diversification

The 3 months correlation between SUNation and Hexcel is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SUNation Energy and Hexcel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexcel and SUNation 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 SUNation Energy are associated (or correlated) with Hexcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexcel has no effect on the direction of SUNation Energy i.e., SUNation Energy and Hexcel go up and down completely randomly.

Pair Corralation between SUNation Energy and Hexcel

Given the investment horizon of 90 days SUNation Energy is expected to under-perform the Hexcel. In addition to that, SUNation Energy is 2.81 times more volatile than Hexcel. It trades about -0.11 of its total potential returns per unit of risk. Hexcel is currently generating about 0.13 per unit of volatility. If you would invest  5,368  in Hexcel on May 14, 2025 and sell it today you would earn a total of  649.00  from holding Hexcel or generate 12.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

SUNation Energy  vs.  Hexcel

SUNation Energy

Risk-Adjusted Performance

Weakest

Over the last 90 days SUNation Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Hexcel

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Hexcel are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Hexcel may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SUNation Energy and Hexcel

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

The idea behind SUNation Energy and Hexcel 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.