Correlation Between First Solar and Intel
Can any of the company-specific risk be diversified away by investing in both First Solar and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Solar and Intel, you can compare the effects of market volatilities on First Solar and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Solar and Intel.
Diversification Opportunities for First Solar and Intel
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Intel is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Solar and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of First Solar i.e., First Solar and Intel go up and down completely randomly.
Pair Corralation between First Solar and Intel
Given the investment horizon of 90 days First Solar is expected to under-perform the Intel. In addition to that, First Solar is 1.11 times more volatile than Intel. It trades about -0.06 of its total potential returns per unit of risk. Intel is currently generating about 0.12 per unit of volatility. If you would invest 2,268 in Intel on August 26, 2024 and sell it today you would earn a total of 182.00 from holding Intel or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Solar vs. Intel
Performance |
| Timeline |
| First Solar |
| Intel |
First Solar and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Solar and Intel
The main advantage of trading using opposite First Solar and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Solar position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| First Solar vs. Enphase Energy | First Solar vs. Sunrun Inc | First Solar vs. Canadian Solar | First Solar 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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