Correlation Between Array Technologies and Shoals Technologies
Can any of the company-specific risk be diversified away by investing in both Array Technologies and Shoals Technologies 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 Array Technologies and Shoals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Array Technologies and Shoals Technologies Group, you can compare the effects of market volatilities on Array Technologies and Shoals Technologies 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 Array Technologies with a short position of Shoals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Array Technologies and Shoals Technologies.
Diversification Opportunities for Array Technologies and Shoals Technologies
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Array and Shoals is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Array Technologies and Shoals Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoals Technologies and Array Technologies 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 Array Technologies are associated (or correlated) with Shoals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoals Technologies has no effect on the direction of Array Technologies i.e., Array Technologies and Shoals Technologies go up and down completely randomly.
Pair Corralation between Array Technologies and Shoals Technologies
Given the investment horizon of 90 days Array Technologies is expected to generate 1.11 times more return on investment than Shoals Technologies. However, Array Technologies is 1.11 times more volatile than Shoals Technologies Group. It trades about -0.03 of its potential returns per unit of risk. Shoals Technologies Group is currently generating about -0.06 per unit of risk. If you would invest 2,185 in Array Technologies on August 24, 2024 and sell it today you would lose (1,522) from holding Array Technologies or give up 69.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Array Technologies vs. Shoals Technologies Group
Performance |
| Timeline |
| Array Technologies |
| Shoals Technologies |
Array Technologies and Shoals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Array Technologies and Shoals Technologies
The main advantage of trading using opposite Array Technologies and Shoals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Array Technologies position performs unexpectedly, Shoals Technologies 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 Shoals Technologies will offset losses from the drop in Shoals Technologies' long position.| Array Technologies vs. SolarEdge Technologies | Array Technologies vs. Enphase Energy | Array Technologies vs. Canadian Solar | Array Technologies vs. Sunrun Inc |
| Shoals Technologies vs. Array Technologies | Shoals Technologies vs. Sunnova Energy International | Shoals Technologies vs. Fluence Energy | Shoals Technologies vs. Playtika Holding Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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