Correlation Between Array Technologies and Solar Integrated
Can any of the company-specific risk be diversified away by investing in both Array Technologies and Solar Integrated 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 Solar Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Array Technologies and Solar Integrated Roofing, you can compare the effects of market volatilities on Array Technologies and Solar Integrated 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 Solar Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Array Technologies and Solar Integrated.
Diversification Opportunities for Array Technologies and Solar Integrated
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Array and Solar is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Array Technologies and Solar Integrated Roofing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Integrated Roofing 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 Solar Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Integrated Roofing has no effect on the direction of Array Technologies i.e., Array Technologies and Solar Integrated go up and down completely randomly.
Pair Corralation between Array Technologies and Solar Integrated
Given the investment horizon of 90 days Array Technologies is expected to generate 7.25 times less return on investment than Solar Integrated. But when comparing it to its historical volatility, Array Technologies is 5.64 times less risky than Solar Integrated. It trades about 0.08 of its potential returns per unit of risk. Solar Integrated Roofing is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Solar Integrated Roofing on August 31, 2024 and sell it today you would lose (0.01) from holding Solar Integrated Roofing or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Array Technologies vs. Solar Integrated Roofing
Performance |
| Timeline |
| Array Technologies |
| Solar Integrated Roofing |
Array Technologies and Solar Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Array Technologies and Solar Integrated
The main advantage of trading using opposite Array Technologies and Solar Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Array Technologies position performs unexpectedly, Solar Integrated 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 Solar Integrated will offset losses from the drop in Solar Integrated's long position.| Array Technologies vs. SolarEdge Technologies | Array Technologies vs. Enphase Energy | Array Technologies vs. Canadian Solar | Array Technologies vs. Sunrun Inc |
| Solar Integrated vs. Newhydrogen | Solar Integrated vs. Ascent Solar Technologies, | Solar Integrated vs. SinglePoint | Solar Integrated vs. TGI Solar Power |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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