Correlation Between First Solar and GCL Poly
Can any of the company-specific risk be diversified away by investing in both First Solar and GCL Poly 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 First Solar and GCL Poly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Solar and GCL Poly Energy Holdings, you can compare the effects of market volatilities on First Solar and GCL Poly 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 First Solar with a short position of GCL Poly. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Solar and GCL Poly.
Diversification Opportunities for First Solar and GCL Poly
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and GCL is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding First Solar and GCL Poly Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCL Poly Energy and First 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 First Solar are associated (or correlated) with GCL Poly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCL Poly Energy has no effect on the direction of First Solar i.e., First Solar and GCL Poly go up and down completely randomly.
Pair Corralation between First Solar and GCL Poly
Given the investment horizon of 90 days First Solar is expected to generate 1.03 times less return on investment than GCL Poly. But when comparing it to its historical volatility, First Solar is 1.95 times less risky than GCL Poly. It trades about 0.03 of its potential returns per unit of risk. GCL Poly Energy Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 25.00 in GCL Poly Energy Holdings on August 27, 2024 and sell it today you would lose (11.00) from holding GCL Poly Energy Holdings or give up 44.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Solar vs. GCL Poly Energy Holdings
Performance |
| Timeline |
| First Solar |
| GCL Poly Energy |
First Solar and GCL Poly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Solar and GCL Poly
The main advantage of trading using opposite First Solar and GCL Poly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Solar position performs unexpectedly, GCL Poly 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 GCL Poly will offset losses from the drop in GCL Poly's long position.| First Solar vs. Enphase Energy | First Solar vs. Sunrun Inc | First Solar vs. Canadian Solar | First Solar vs. SolarEdge Technologies |
| GCL Poly vs. SMA Solar Technology | GCL Poly vs. Xinyi Solar Holdings | GCL Poly vs. SMA Solar Technology | GCL Poly vs. Three Sixty Solar |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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