Correlation Between Shoals Technologies and Three Sixty
Can any of the company-specific risk be diversified away by investing in both Shoals Technologies and Three Sixty 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 Three Sixty 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 Three Sixty Solar, you can compare the effects of market volatilities on Shoals Technologies and Three Sixty 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 Three Sixty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoals Technologies and Three Sixty.
Diversification Opportunities for Shoals Technologies and Three Sixty
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shoals and Three is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Shoals Technologies Group and Three Sixty Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Three Sixty Solar 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 Three Sixty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Three Sixty Solar has no effect on the direction of Shoals Technologies i.e., Shoals Technologies and Three Sixty go up and down completely randomly.
Pair Corralation between Shoals Technologies and Three Sixty
Given the investment horizon of 90 days Shoals Technologies Group is expected to generate 0.17 times more return on investment than Three Sixty. However, Shoals Technologies Group is 5.81 times less risky than Three Sixty. It trades about -0.05 of its potential returns per unit of risk. Three Sixty Solar is currently generating about -0.24 per unit of risk. If you would invest 489.00 in Shoals Technologies Group on August 24, 2024 and sell it today you would lose (49.00) from holding Shoals Technologies Group or give up 10.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shoals Technologies Group vs. Three Sixty Solar
Performance |
| Timeline |
| Shoals Technologies |
| Three Sixty Solar |
Shoals Technologies and Three Sixty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoals Technologies and Three Sixty
The main advantage of trading using opposite Shoals Technologies and Three Sixty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoals Technologies position performs unexpectedly, Three Sixty 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 Three Sixty will offset losses from the drop in Three Sixty'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 |
| Three Sixty vs. SMA Solar Technology | Three Sixty vs. Xinyi Solar Holdings | Three Sixty vs. SMA Solar Technology | Three Sixty vs. GCL Poly Energy Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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