Correlation Between SunHydrogen and FTC Solar
Can any of the company-specific risk be diversified away by investing in both SunHydrogen and FTC Solar 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 SunHydrogen and FTC Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunHydrogen and FTC Solar, you can compare the effects of market volatilities on SunHydrogen and FTC Solar 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 SunHydrogen with a short position of FTC Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunHydrogen and FTC Solar.
Diversification Opportunities for SunHydrogen and FTC Solar
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between SunHydrogen and FTC is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding SunHydrogen and FTC Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC Solar and SunHydrogen 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 SunHydrogen are associated (or correlated) with FTC Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTC Solar has no effect on the direction of SunHydrogen i.e., SunHydrogen and FTC Solar go up and down completely randomly.
Pair Corralation between SunHydrogen and FTC Solar
Given the investment horizon of 90 days SunHydrogen is expected to under-perform the FTC Solar. But the pink sheet apears to be less risky and, when comparing its historical volatility, SunHydrogen is 38.29 times less risky than FTC Solar. The pink sheet trades about -0.16 of its potential returns per unit of risk. The FTC Solar is currently generating about 0.19 of returns per unit of risk over similar time horizon. 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 | 100.0% |
| Values | Daily Returns |
SunHydrogen vs. FTC Solar
Performance |
| Timeline |
| SunHydrogen |
| FTC Solar |
SunHydrogen and FTC Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunHydrogen and FTC Solar
The main advantage of trading using opposite SunHydrogen and FTC Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunHydrogen position performs unexpectedly, FTC Solar 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 FTC Solar will offset losses from the drop in FTC Solar's long position.| SunHydrogen vs. Enerkon Solar International | SunHydrogen vs. Ascent Solar Technologies, | SunHydrogen vs. Solar Integrated Roofing | SunHydrogen vs. mPhase Technologies |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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