Correlation Between FTC Solar and SinglePoint

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Can any of the company-specific risk be diversified away by investing in both FTC Solar and SinglePoint 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 SinglePoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTC Solar and SinglePoint, you can compare the effects of market volatilities on FTC Solar and SinglePoint 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 SinglePoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTC Solar and SinglePoint.

Diversification Opportunities for FTC Solar and SinglePoint

0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between FTC and SinglePoint is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding FTC Solar and SinglePoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SinglePoint 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 SinglePoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SinglePoint has no effect on the direction of FTC Solar i.e., FTC Solar and SinglePoint go up and down completely randomly.

Pair Corralation between FTC Solar and SinglePoint

If you would invest  314.00  in FTC Solar on October 24, 2024 and sell it today you would earn a total of  59.00  from holding FTC Solar or generate 18.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy5.26%
ValuesDaily Returns

FTC Solar  vs.  SinglePoint

 Performance 
       Timeline  
FTC Solar 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FTC Solar has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
SinglePoint 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Good
Over the last 90 days SinglePoint has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly inconsistent basic indicators, SinglePoint reported solid returns over the last few months and may actually be approaching a breakup point.

FTC Solar and SinglePoint Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FTC Solar and SinglePoint

The main advantage of trading using opposite FTC Solar and SinglePoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTC Solar position performs unexpectedly, SinglePoint 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 SinglePoint will offset losses from the drop in SinglePoint's long position.
The idea behind FTC Solar and SinglePoint pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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