Correlation Between ELL ENVIRONHLDGS and FTC SOLAR
Can any of the company-specific risk be diversified away by investing in both ELL ENVIRONHLDGS and FTC SOLAR 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 ELL ENVIRONHLDGS and FTC SOLAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELL ENVIRONHLDGS HD 0001 and FTC SOLAR INC, you can compare the effects of market volatilities on ELL ENVIRONHLDGS and FTC SOLAR 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 ELL ENVIRONHLDGS with a short position of FTC SOLAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELL ENVIRONHLDGS and FTC SOLAR.
Diversification Opportunities for ELL ENVIRONHLDGS and FTC SOLAR
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELL and FTC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ELL ENVIRONHLDGS HD 0001 and FTC SOLAR INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC SOLAR INC and ELL ENVIRONHLDGS 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 ELL ENVIRONHLDGS HD 0001 are associated (or correlated) with FTC SOLAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTC SOLAR INC has no effect on the direction of ELL ENVIRONHLDGS i.e., ELL ENVIRONHLDGS and FTC SOLAR go up and down completely randomly.
Pair Corralation between ELL ENVIRONHLDGS and FTC SOLAR
Assuming the 90 days horizon ELL ENVIRONHLDGS HD 0001 is expected to generate 7.88 times more return on investment than FTC SOLAR. However, ELL ENVIRONHLDGS is 7.88 times more volatile than FTC SOLAR INC. It trades about 0.12 of its potential returns per unit of risk. FTC SOLAR INC is currently generating about 0.02 per unit of risk. If you would invest 1.50 in ELL ENVIRONHLDGS HD 0001 on October 17, 2024 and sell it today you would lose (0.10) from holding ELL ENVIRONHLDGS HD 0001 or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELL ENVIRONHLDGS HD 0001 vs. FTC SOLAR INC
Performance |
| Timeline |
| ELL ENVIRONHLDGS |
| FTC SOLAR INC |
ELL ENVIRONHLDGS and FTC SOLAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELL ENVIRONHLDGS and FTC SOLAR
The main advantage of trading using opposite ELL ENVIRONHLDGS and FTC SOLAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELL ENVIRONHLDGS position performs unexpectedly, FTC SOLAR 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 FTC SOLAR will offset losses from the drop in FTC SOLAR's long position.| ELL ENVIRONHLDGS vs. Webster Financial | ELL ENVIRONHLDGS vs. United Insurance Holdings | ELL ENVIRONHLDGS vs. Discover Financial Services | ELL ENVIRONHLDGS vs. Synchrony Financial |
| FTC SOLAR vs. NEW MILLENNIUM IRON | FTC SOLAR vs. COSMOSTEEL HLDGS | FTC SOLAR vs. The Japan Steel | FTC SOLAR vs. ELL ENVIRONHLDGS HD 0001 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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