Correlation Between SUNation Energy and Solid Power

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

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

Diversification Opportunities for SUNation Energy and Solid Power

-0.49

Correlation Coefficient

SUNation Energy  Solid Power

Very good diversification

The 3 months correlation between SUNation and Solid is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SUNation Energy and Solid Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Power 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 Solid Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Power has no effect on the direction of SUNation Energy i.e., SUNation Energy and Solid Power go up and down completely randomly.

Pair Corralation between SUNation Energy and Solid Power

Given the investment horizon of 90 days SUNation Energy is expected to generate 6.39 times less return on investment than Solid Power. But when comparing it to its historical volatility, SUNation Energy is 2.21 times less risky than Solid Power. It trades about 0.12 of its potential returns per unit of risk. Solid Power is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  175.00  in Solid Power on April 14, 2025 and sell it today you would earn a total of  86.00  from holding Solid Power or generate 49.14% return on investment over 90 days.

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

SUNation Energy  vs.  Solid Power

SUNation Energy

Risk-Adjusted Performance

Very Weak

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

Solid Power

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Solid Power are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Solid Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SUNation Energy and Solid Power

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

The idea behind SUNation Energy and Solid Power 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 Stocks Directory module to find actively traded stocks across global markets.