Correlation Between Promotora and First Solar
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By analyzing existing cross correlation between Promotora y Operadora and First Solar, you can compare the effects of market volatilities on Promotora and First 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 Promotora with a short position of First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promotora and First Solar.
Diversification Opportunities for Promotora and First Solar
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Promotora and First is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Promotora y Operadora and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and Promotora 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 Promotora y Operadora are associated (or correlated) with First Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Solar has no effect on the direction of Promotora i.e., Promotora and First Solar go up and down completely randomly.
Pair Corralation between Promotora and First Solar
Assuming the 90 days trading horizon Promotora is expected to generate 1.0 times less return on investment than First Solar. But when comparing it to its historical volatility, Promotora y Operadora is 2.02 times less risky than First Solar. It trades about 0.09 of its potential returns per unit of risk. First Solar is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 270,840 in First Solar on November 8, 2024 and sell it today you would earn a total of 75,264 from holding First Solar or generate 27.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Promotora y Operadora vs. First Solar
Performance |
| Timeline |
| Promotora y Operadora |
| First Solar |
Promotora and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promotora and First Solar
The main advantage of trading using opposite Promotora and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promotora position performs unexpectedly, First 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 First Solar will offset losses from the drop in First Solar's long position.The idea behind Promotora y Operadora and First Solar 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.| First Solar vs. Applied Materials | First Solar vs. Verizon Communications | First Solar vs. CVS Health | First Solar vs. The Bank of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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