Correlation Between FTC SOLAR and NEW MILLENNIUM
Can any of the company-specific risk be diversified away by investing in both FTC SOLAR and NEW MILLENNIUM 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 FTC SOLAR and NEW MILLENNIUM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTC SOLAR INC and NEW MILLENNIUM IRON, you can compare the effects of market volatilities on FTC SOLAR and NEW MILLENNIUM 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 FTC SOLAR with a short position of NEW MILLENNIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTC SOLAR and NEW MILLENNIUM.
Diversification Opportunities for FTC SOLAR and NEW MILLENNIUM
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FTC and NEW is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding FTC SOLAR INC and NEW MILLENNIUM IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW MILLENNIUM IRON and FTC 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 FTC SOLAR INC are associated (or correlated) with NEW MILLENNIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW MILLENNIUM IRON has no effect on the direction of FTC SOLAR i.e., FTC SOLAR and NEW MILLENNIUM go up and down completely randomly.
Pair Corralation between FTC SOLAR and NEW MILLENNIUM
Assuming the 90 days horizon FTC SOLAR INC is expected to generate 8.79 times more return on investment than NEW MILLENNIUM. However, FTC SOLAR is 8.79 times more volatile than NEW MILLENNIUM IRON. It trades about 0.06 of its potential returns per unit of risk. NEW MILLENNIUM IRON is currently generating about 0.01 per unit of risk. If you would invest 426.00 in FTC SOLAR INC on October 17, 2024 and sell it today you would earn a total of 21.00 from holding FTC SOLAR INC or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.63% |
| Values | Daily Returns |
FTC SOLAR INC vs. NEW MILLENNIUM IRON
Performance |
| Timeline |
| FTC SOLAR INC |
| NEW MILLENNIUM IRON |
FTC SOLAR and NEW MILLENNIUM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTC SOLAR and NEW MILLENNIUM
The main advantage of trading using opposite FTC SOLAR and NEW MILLENNIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTC SOLAR position performs unexpectedly, NEW MILLENNIUM 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 NEW MILLENNIUM will offset losses from the drop in NEW MILLENNIUM's long position.| FTC SOLAR vs. NEW MILLENNIUM IRON | FTC SOLAR vs. COSMOSTEEL HLDGS | FTC SOLAR vs. The Japan Steel | FTC SOLAR vs. ELL ENVIRONHLDGS HD 0001 |
| NEW MILLENNIUM vs. FUYO GENERAL LEASE | NEW MILLENNIUM vs. Jacquet Metal Service | NEW MILLENNIUM vs. ANTA SPORTS PRODUCT | NEW MILLENNIUM vs. GRENKELEASING Dusseldorf |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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