Correlation Between Solar Alliance and FTC Solar
Can any of the company-specific risk be diversified away by investing in both Solar Alliance 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 Solar Alliance and FTC Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solar Alliance Energy and FTC Solar, you can compare the effects of market volatilities on Solar Alliance 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 Solar Alliance with a short position of FTC Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar Alliance and FTC Solar.
Diversification Opportunities for Solar Alliance and FTC Solar
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solar and FTC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Solar Alliance Energy and FTC Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC Solar and Solar Alliance 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 Solar Alliance Energy 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 Solar Alliance i.e., Solar Alliance and FTC Solar go up and down completely randomly.
Pair Corralation between Solar Alliance and FTC Solar
Assuming the 90 days horizon Solar Alliance Energy is expected to under-perform the FTC Solar. But the otc stock apears to be less risky and, when comparing its historical volatility, Solar Alliance Energy is 30.69 times less risky than FTC Solar. The otc stock trades about -0.14 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solar Alliance Energy vs. FTC Solar
Performance |
| Timeline |
| Solar Alliance Energy |
| FTC Solar |
Solar Alliance and FTC Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solar Alliance and FTC Solar
The main advantage of trading using opposite Solar Alliance and FTC Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solar Alliance 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.| Solar Alliance vs. Aurora Solar Technologies | Solar Alliance vs. Cryptoblox Technologies | Solar Alliance vs. Sun Pacific Holding | Solar Alliance vs. Solar Integrated Roofing |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |