Correlation Between FibroGen and First Solar
Can any of the company-specific risk be diversified away by investing in both FibroGen and First 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 FibroGen and First Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibroGen and First Solar, you can compare the effects of market volatilities on FibroGen and First 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 FibroGen with a short position of First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibroGen and First Solar.
Diversification Opportunities for FibroGen and First Solar
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FibroGen and First is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FibroGen and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and FibroGen 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 FibroGen are associated (or correlated) with First Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Solar has no effect on the direction of FibroGen i.e., FibroGen and First Solar go up and down completely randomly.
Pair Corralation between FibroGen and First Solar
Assuming the 90 days trading horizon FibroGen is expected to under-perform the First Solar. In addition to that, FibroGen is 2.58 times more volatile than First Solar. It trades about -0.03 of its total potential returns per unit of risk. First Solar is currently generating about 0.02 per unit of volatility. If you would invest 303,500 in First Solar on November 1, 2024 and sell it today you would earn a total of 37,500 from holding First Solar or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
FibroGen vs. First Solar
Performance |
| Timeline |
| FibroGen |
| First Solar |
FibroGen and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibroGen and First Solar
The main advantage of trading using opposite FibroGen and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibroGen position performs unexpectedly, First 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 First Solar will offset losses from the drop in First Solar's long position.| FibroGen vs. Vertex Pharmaceuticals | FibroGen vs. Qulitas Controladora SAB | FibroGen vs. Citigroup | FibroGen vs. Delta Air Lines |
| First Solar vs. Hoteles City Express | First Solar vs. The Home Depot | First Solar vs. Prudential Financial | First Solar vs. United States Steel |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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