Correlation Between Shoals Technologies and Nano X
Can any of the company-specific risk be diversified away by investing in both Shoals Technologies and Nano X 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 Nano X 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 Nano X Imaging, you can compare the effects of market volatilities on Shoals Technologies and Nano X 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 Nano X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoals Technologies and Nano X.
Diversification Opportunities for Shoals Technologies and Nano X
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shoals and Nano is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shoals Technologies Group and Nano X Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano X Imaging 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 Nano X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano X Imaging has no effect on the direction of Shoals Technologies i.e., Shoals Technologies and Nano X go up and down completely randomly.
Pair Corralation between Shoals Technologies and Nano X
Given the investment horizon of 90 days Shoals Technologies Group is expected to under-perform the Nano X. But the stock apears to be less risky and, when comparing its historical volatility, Shoals Technologies Group is 1.6 times less risky than Nano X. The stock trades about -0.06 of its potential returns per unit of risk. The Nano X Imaging is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 807.00 in Nano X Imaging on November 2, 2024 and sell it today you would lose (49.00) from holding Nano X Imaging or give up 6.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shoals Technologies Group vs. Nano X Imaging
Performance |
| Timeline |
| Shoals Technologies |
| Nano X Imaging |
Shoals Technologies and Nano X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoals Technologies and Nano X
The main advantage of trading using opposite Shoals Technologies and Nano X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoals Technologies position performs unexpectedly, Nano X 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 Nano X will offset losses from the drop in Nano X's long position.| Shoals Technologies vs. Array Technologies | Shoals Technologies vs. Sunnova Energy International | Shoals Technologies vs. Fluence Energy | Shoals Technologies vs. Playtika Holding Corp |
| Nano X vs. Abbott Laboratories | Nano X vs. Stryker | Nano X vs. Edwards Lifesciences Corp | Nano X vs. Boston Scientific Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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