Correlation Between FTC Solar and Solar Integrated
Can any of the company-specific risk be diversified away by investing in both FTC Solar and Solar Integrated 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 Solar Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTC Solar and Solar Integrated Roofing, you can compare the effects of market volatilities on FTC Solar and Solar Integrated 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 Solar Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTC Solar and Solar Integrated.
Diversification Opportunities for FTC Solar and Solar Integrated
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between FTC and Solar is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding FTC Solar and Solar Integrated Roofing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Integrated Roofing 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 Solar Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Integrated Roofing has no effect on the direction of FTC Solar i.e., FTC Solar and Solar Integrated go up and down completely randomly.
Pair Corralation between FTC Solar and Solar Integrated
Given the investment horizon of 90 days FTC Solar is expected to generate 4.52 times more return on investment than Solar Integrated. However, FTC Solar is 4.52 times more volatile than Solar Integrated Roofing. It trades about 0.19 of its potential returns per unit of risk. Solar Integrated Roofing is currently generating about 0.17 per unit of risk. If you would invest 56.00 in FTC Solar on September 3, 2024 and sell it today you would lose (25.00) from holding FTC Solar or give up 44.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
FTC Solar vs. Solar Integrated Roofing
Performance |
| Timeline |
| FTC Solar |
| Solar Integrated Roofing |
FTC Solar and Solar Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTC Solar and Solar Integrated
The main advantage of trading using opposite FTC Solar and Solar Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTC Solar position performs unexpectedly, Solar Integrated 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 Solar Integrated will offset losses from the drop in Solar Integrated'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 |
| Solar Integrated vs. Newhydrogen | Solar Integrated vs. Ascent Solar Technologies, | Solar Integrated vs. SinglePoint | Solar Integrated vs. TGI Solar Power |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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