Correlation Between Fiserv, and Shoals Technologies

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Can any of the company-specific risk be diversified away by investing in both Fiserv, 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 Fiserv, and Shoals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiserv, and Shoals Technologies Group, you can compare the effects of market volatilities on Fiserv, 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 Fiserv, with a short position of Shoals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiserv, and Shoals Technologies.

Diversification Opportunities for Fiserv, and Shoals Technologies

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Fiserv, and Shoals is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fiserv, and Shoals Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoals Technologies and Fiserv, 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 Fiserv, 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 Fiserv, i.e., Fiserv, and Shoals Technologies go up and down completely randomly.

Pair Corralation between Fiserv, and Shoals Technologies

Allowing for the 90-day total investment horizon Fiserv, is expected to generate 0.23 times more return on investment than Shoals Technologies. However, Fiserv, is 4.34 times less risky than Shoals Technologies. It trades about 0.25 of its potential returns per unit of risk. Shoals Technologies Group is currently generating about -0.05 per unit of risk. If you would invest  20,236  in Fiserv, on August 24, 2024 and sell it today you would earn a total of  1,505  from holding Fiserv, or generate 7.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Fiserv,  vs.  Shoals Technologies Group

 Performance 
       Timeline  
Fiserv, 

Risk-Adjusted Performance

30 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv, are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Fiserv, demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Shoals Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shoals Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fiserv, and Shoals Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fiserv, and Shoals Technologies

The main advantage of trading using opposite Fiserv, and Shoals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiserv, 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.
The idea behind Fiserv, and Shoals Technologies Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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