Correlation Between Maxeon Solar and ISun

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

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

Diversification Opportunities for Maxeon Solar and ISun

-0.39

Correlation Coefficient

Maxeon Solar  ISun

Very good diversification

The 3 months correlation between Maxeon and ISun is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Maxeon Solar Technologies and ISun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISun Inc and Maxeon Solar 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 Maxeon Solar Technologies are associated (or correlated) with ISun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISun Inc has no effect on the direction of Maxeon Solar i.e., Maxeon Solar and ISun go up and down completely randomly.

Pair Corralation between Maxeon Solar and ISun

Given the investment horizon of 90 days Maxeon Solar Technologies is expected to generate 0.74 times more return on investment than ISun. However, Maxeon Solar Technologies is 1.36 times less risky than ISun. It trades about -0.08 of its potential returns per unit of risk. ISun Inc is currently generating about -0.06 per unit of risk. If you would invest  51,300  in Maxeon Solar Technologies on September 14, 2024 and sell it today you would lose (50,736) from holding Maxeon Solar Technologies or give up 98.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.93%
Values	Daily Returns

Maxeon Solar Technologies  vs.  ISun Inc

Maxeon Solar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maxeon Solar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Maxeon Solar is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ISun Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ISun Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ISun is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Maxeon Solar and ISun

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

The idea behind Maxeon Solar Technologies and ISun 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.

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 the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.