Correlation Between Shoals Technologies and Array Technologies
Can any of the company-specific risk be diversified away by investing in both Shoals Technologies and Array Technologies 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 Shoals Technologies and Array Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoals Technologies Group and Array Technologies, you can compare the effects of market volatilities on Shoals Technologies and Array Technologies 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 Shoals Technologies with a short position of Array Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoals Technologies and Array Technologies.
Diversification Opportunities for Shoals Technologies and Array Technologies
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shoals and Array is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shoals Technologies Group and Array Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Array Technologies and Shoals Technologies 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 Shoals Technologies Group are associated (or correlated) with Array Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Array Technologies has no effect on the direction of Shoals Technologies i.e., Shoals Technologies and Array Technologies go up and down completely randomly.
Pair Corralation between Shoals Technologies and Array Technologies
Given the investment horizon of 90 days Shoals Technologies Group is expected to under-perform the Array Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Shoals Technologies Group is 1.07 times less risky than Array Technologies. The stock trades about -0.06 of its potential returns per unit of risk. The Array Technologies is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,113 in Array Technologies on November 2, 2024 and sell it today you would lose (1,380) from holding Array Technologies or give up 65.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Shoals Technologies Group vs. Array Technologies
Performance |
| Timeline |
| Shoals Technologies |
| Array Technologies |
Shoals Technologies and Array Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoals Technologies and Array Technologies
The main advantage of trading using opposite Shoals Technologies and Array Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoals Technologies position performs unexpectedly, Array Technologies 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 Array Technologies will offset losses from the drop in Array Technologies' long position.| Shoals Technologies vs. Array Technologies | Shoals Technologies vs. Sunnova Energy International | Shoals Technologies vs. Fluence Energy | Shoals Technologies vs. Playtika Holding Corp |
| Array Technologies vs. SolarEdge Technologies | Array Technologies vs. Enphase Energy | Array Technologies vs. Canadian Solar | Array Technologies 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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