Correlation Between Pixelworks and First Solar
Can any of the company-specific risk be diversified away by investing in both Pixelworks and First 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 Pixelworks and First Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pixelworks and First Solar, you can compare the effects of market volatilities on Pixelworks 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 Pixelworks with a short position of First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pixelworks and First Solar.
Diversification Opportunities for Pixelworks and First Solar
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pixelworks and First is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pixelworks and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and Pixelworks 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 Pixelworks 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 Pixelworks i.e., Pixelworks and First Solar go up and down completely randomly.
Pair Corralation between Pixelworks and First Solar
Given the investment horizon of 90 days Pixelworks is expected to generate 1.53 times more return on investment than First Solar. However, Pixelworks is 1.53 times more volatile than First Solar. It trades about 0.04 of its potential returns per unit of risk. First Solar is currently generating about -0.03 per unit of risk. If you would invest 75.00 in Pixelworks on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Pixelworks or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pixelworks vs. First Solar
Performance |
| Timeline |
| Pixelworks |
| First Solar |
Pixelworks and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pixelworks and First Solar
The main advantage of trading using opposite Pixelworks and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pixelworks 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.| Pixelworks vs. First Solar | Pixelworks vs. Sunrun Inc | Pixelworks vs. Canadian Solar | Pixelworks vs. SolarEdge Technologies |
| First Solar vs. Enphase Energy | First Solar vs. Sunrun Inc | First Solar vs. Canadian Solar | First Solar vs. SolarEdge Technologies |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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