Correlation Between Nextracker and TGI Solar
Can any of the company-specific risk be diversified away by investing in both Nextracker and TGI 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 Nextracker and TGI Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextracker Class A and TGI Solar Power, you can compare the effects of market volatilities on Nextracker and TGI 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 Nextracker with a short position of TGI Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextracker and TGI Solar.
Diversification Opportunities for Nextracker and TGI Solar
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nextracker and TGI is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nextracker Class A and TGI Solar Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGI Solar Power and Nextracker 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 Nextracker Class A are associated (or correlated) with TGI Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGI Solar Power has no effect on the direction of Nextracker i.e., Nextracker and TGI Solar go up and down completely randomly.
Pair Corralation between Nextracker and TGI Solar
Considering the 90-day investment horizon Nextracker is expected to generate 15.56 times less return on investment than TGI Solar. But when comparing it to its historical volatility, Nextracker Class A is 4.51 times less risky than TGI Solar. It trades about 0.02 of its potential returns per unit of risk. TGI Solar Power is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.26 in TGI Solar Power on September 1, 2024 and sell it today you would lose (0.18) from holding TGI Solar Power or give up 69.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.04% |
| Values | Daily Returns |
Nextracker Class A vs. TGI Solar Power
Performance |
| Timeline |
| Nextracker Class A |
| TGI Solar Power |
Nextracker and TGI Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextracker and TGI Solar
The main advantage of trading using opposite Nextracker and TGI Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextracker position performs unexpectedly, TGI 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 TGI Solar will offset losses from the drop in TGI Solar's long position.| Nextracker vs. Vast Renewables Limited | Nextracker vs. 1847 Holdings LLC | Nextracker vs. Westport Fuel Systems | Nextracker vs. Falcons Beyond Global, |
| TGI Solar vs. Ascent Solar Technologies, | TGI Solar vs. SinglePoint | TGI Solar vs. SunHydrogen | TGI Solar vs. Sunrun Inc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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