Correlation Between Hawaiian Holdings and Sunrun

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Can any of the company-specific risk be diversified away by investing in both Hawaiian Holdings 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 Hawaiian Holdings and Sunrun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Holdings and Sunrun Inc, you can compare the effects of market volatilities on Hawaiian Holdings 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 Hawaiian Holdings with a short position of Sunrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Holdings and Sunrun.

Diversification Opportunities for Hawaiian Holdings and Sunrun

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hawaiian and Sunrun is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc and Hawaiian Holdings 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 Holdings 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 Hawaiian Holdings i.e., Hawaiian Holdings and Sunrun go up and down completely randomly.

Pair Corralation between Hawaiian Holdings and Sunrun

Allowing for the 90-day total investment horizon Hawaiian Holdings is expected to under-perform the Sunrun. But the stock apears to be less risky and, when comparing its historical volatility, Hawaiian Holdings is 3.17 times less risky than Sunrun. The stock trades about -0.05 of its potential returns per unit of risk. The Sunrun Inc is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,257  in Sunrun Inc on September 2, 2022 and sell it today you would earn a total of  876.00  from holding Sunrun Inc or generate 38.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hawaiian Holdings  vs.  Sunrun Inc

 Performance (%) 
       Timeline  
Hawaiian Holdings 
Hawaiian Performance
0 of 100
Over the last 90 days Hawaiian Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hawaiian Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Hawaiian Price Channel

Sunrun Inc 
Sunrun Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Sunrun Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Sunrun may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Sunrun Price Channel

Hawaiian Holdings and Sunrun Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hawaiian Holdings and Sunrun

The main advantage of trading using opposite Hawaiian Holdings and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Holdings 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.
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The idea behind Hawaiian Holdings 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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Check out your portfolio center. 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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