Correlation Between First State and SunPower
Can any of the company-specific risk be diversified away by investing in both First State and SunPower 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 State and SunPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First State Financial and SunPower, you can compare the effects of market volatilities on First State and SunPower 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 State with a short position of SunPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and SunPower.
Diversification Opportunities for First State and SunPower
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and SunPower is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and SunPower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunPower and First State 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 State Financial are associated (or correlated) with SunPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunPower has no effect on the direction of First State i.e., First State and SunPower go up and down completely randomly.
Pair Corralation between First State and SunPower
If you would invest (100.00) in SunPower on August 30, 2024 and sell it today you would earn a total of 100.00 from holding SunPower or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
First State Financial vs. SunPower
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SunPower |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First State and SunPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and SunPower
The main advantage of trading using opposite First State and SunPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, SunPower 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 SunPower will offset losses from the drop in SunPower's long position.| First State vs. First Interstate BancSystem | First State vs. First Financial Bankshares | First State vs. Independent Bank Group | First State vs. CVB Financial |
| SunPower vs. Enphase Energy | SunPower vs. First Solar | SunPower vs. Sunnova Energy International | SunPower 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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