Correlation Between FTC Solar and Impinj
Can any of the company-specific risk be diversified away by investing in both FTC Solar and Impinj 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 Impinj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTC Solar and Impinj Inc, you can compare the effects of market volatilities on FTC Solar and Impinj 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 Impinj. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTC Solar and Impinj.
Diversification Opportunities for FTC Solar and Impinj
Poor diversification
The 3 months correlation between FTC and Impinj is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding FTC Solar and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj Inc 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 Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of FTC Solar i.e., FTC Solar and Impinj go up and down completely randomly.
Pair Corralation between FTC Solar and Impinj
Given the investment horizon of 90 days FTC Solar is expected to under-perform the Impinj. In addition to that, FTC Solar is 2.17 times more volatile than Impinj Inc. It trades about -0.01 of its total potential returns per unit of risk. Impinj Inc is currently generating about 0.04 per unit of volatility. If you would invest 12,362 in Impinj Inc on August 27, 2024 and sell it today you would earn a total of 6,742 from holding Impinj Inc or generate 54.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTC Solar vs. Impinj Inc
Performance |
| Timeline |
| FTC Solar |
| Impinj Inc |
FTC Solar and Impinj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTC Solar and Impinj
The main advantage of trading using opposite FTC Solar and Impinj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTC Solar position performs unexpectedly, Impinj 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 Impinj will offset losses from the drop in Impinj'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 |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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