Correlation Between First Solar and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both First Solar and Ichor Holdings 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 Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Solar and Ichor Holdings, you can compare the effects of market volatilities on First Solar and Ichor Holdings 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 Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Solar and Ichor Holdings.
Diversification Opportunities for First Solar and Ichor Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Ichor is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding First Solar and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings 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 Ichor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Holdings has no effect on the direction of First Solar i.e., First Solar and Ichor Holdings go up and down completely randomly.
Pair Corralation between First Solar and Ichor Holdings
Given the investment horizon of 90 days First Solar is expected to under-perform the Ichor Holdings. But the stock apears to be less risky and, when comparing its historical volatility, First Solar is 1.18 times less risky than Ichor Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Ichor Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,832 in Ichor Holdings on August 30, 2024 and sell it today you would earn a total of 431.00 from holding Ichor Holdings or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Solar vs. Ichor Holdings
Performance |
| Timeline |
| First Solar |
| Ichor Holdings |
First Solar and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Solar and Ichor Holdings
The main advantage of trading using opposite First Solar and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Solar position performs unexpectedly, Ichor Holdings 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 Ichor Holdings will offset losses from the drop in Ichor Holdings' long position.| First Solar vs. Enphase Energy | First Solar vs. Sunrun Inc | First Solar vs. Canadian Solar | First Solar vs. SolarEdge Technologies |
| Ichor Holdings vs. First Solar | Ichor Holdings vs. Sunrun Inc | Ichor Holdings vs. Canadian Solar | Ichor Holdings vs. SolarEdge Technologies |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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