Correlation Between FTC Solar and AstroNova
Can any of the company-specific risk be diversified away by investing in both FTC Solar and AstroNova 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 FTC Solar and AstroNova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTC Solar and AstroNova, you can compare the effects of market volatilities on FTC Solar and AstroNova 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 FTC Solar with a short position of AstroNova. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTC Solar and AstroNova.
Diversification Opportunities for FTC Solar and AstroNova
Very good diversification
The 3 months correlation between FTC and AstroNova is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding FTC Solar and AstroNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstroNova and FTC 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 FTC Solar are associated (or correlated) with AstroNova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstroNova has no effect on the direction of FTC Solar i.e., FTC Solar and AstroNova go up and down completely randomly.
Pair Corralation between FTC Solar and AstroNova
Given the investment horizon of 90 days FTC Solar is expected to under-perform the AstroNova. In addition to that, FTC Solar is 1.52 times more volatile than AstroNova. It trades about -0.17 of its total potential returns per unit of risk. AstroNova is currently generating about -0.02 per unit of volatility. If you would invest 1,206 in AstroNova on November 18, 2024 and sell it today you would lose (26.00) from holding AstroNova or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTC Solar vs. AstroNova
Performance |
| Timeline |
| FTC Solar |
| AstroNova |
FTC Solar and AstroNova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTC Solar and AstroNova
The main advantage of trading using opposite FTC Solar and AstroNova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTC Solar position performs unexpectedly, AstroNova 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 AstroNova will offset losses from the drop in AstroNova's long position.| FTC Solar vs. Sunnova Energy International | FTC Solar vs. JinkoSolar Holding | FTC Solar vs. Nextracker Class A | FTC Solar vs. Canadian Solar |
| AstroNova vs. Key Tronic | AstroNova vs. Identiv | AstroNova vs. Red Cat Holdings | AstroNova vs. TransAct Technologies Incorporated |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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