Correlation Between FTC Solar and SunHydrogen
Can any of the company-specific risk be diversified away by investing in both FTC Solar and SunHydrogen 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 SunHydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTC Solar and SunHydrogen, you can compare the effects of market volatilities on FTC Solar and SunHydrogen 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 SunHydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTC Solar and SunHydrogen.
Diversification Opportunities for FTC Solar and SunHydrogen
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between FTC and SunHydrogen is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding FTC Solar and SunHydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunHydrogen 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 SunHydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunHydrogen has no effect on the direction of FTC Solar i.e., FTC Solar and SunHydrogen go up and down completely randomly.
Pair Corralation between FTC Solar and SunHydrogen
Given the investment horizon of 90 days FTC Solar is expected to generate 5.92 times more return on investment than SunHydrogen. However, FTC Solar is 5.92 times more volatile than SunHydrogen. It trades about 0.04 of its potential returns per unit of risk. SunHydrogen is currently generating about 0.02 per unit of risk. If you would invest 271.00 in FTC Solar on September 3, 2024 and sell it today you would lose (240.00) from holding FTC Solar or give up 88.56% 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. SunHydrogen
Performance |
| Timeline |
| FTC Solar |
| SunHydrogen |
FTC Solar and SunHydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTC Solar and SunHydrogen
The main advantage of trading using opposite FTC Solar and SunHydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTC Solar position performs unexpectedly, SunHydrogen 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 SunHydrogen will offset losses from the drop in SunHydrogen'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 |
| SunHydrogen vs. Enerkon Solar International | SunHydrogen vs. Ascent Solar Technologies, | SunHydrogen vs. Solar Integrated Roofing | SunHydrogen vs. mPhase 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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