Correlation Between Shoals Technologies and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both Shoals Technologies and SolarEdge 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 SolarEdge 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 SolarEdge Technologies, you can compare the effects of market volatilities on Shoals Technologies and SolarEdge 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 SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoals Technologies and SolarEdge Technologies.
Diversification Opportunities for Shoals Technologies and SolarEdge Technologies
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shoals and SolarEdge is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shoals Technologies Group and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge 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 SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of Shoals Technologies i.e., Shoals Technologies and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between Shoals Technologies and SolarEdge Technologies
Given the investment horizon of 90 days Shoals Technologies Group is expected to under-perform the SolarEdge Technologies. In addition to that, Shoals Technologies is 1.11 times more volatile than SolarEdge Technologies. It trades about -0.17 of its total potential returns per unit of risk. SolarEdge Technologies is currently generating about -0.12 per unit of volatility. If you would invest 1,528 in SolarEdge Technologies on November 4, 2024 and sell it today you would lose (218.00) from holding SolarEdge Technologies or give up 14.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shoals Technologies Group vs. SolarEdge Technologies
Performance |
| Timeline |
| Shoals Technologies |
| SolarEdge Technologies |
Shoals Technologies and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoals Technologies and SolarEdge Technologies
The main advantage of trading using opposite Shoals Technologies and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoals Technologies position performs unexpectedly, SolarEdge 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 SolarEdge Technologies will offset losses from the drop in SolarEdge 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 |
| SolarEdge Technologies vs. First Solar | SolarEdge Technologies vs. Sunrun Inc | SolarEdge Technologies vs. Canadian Solar | SolarEdge Technologies vs. Enphase Energy |
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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