Correlation Between Sitime and FTC Solar
Can any of the company-specific risk be diversified away by investing in both Sitime 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 Sitime and FTC Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitime and FTC Solar, you can compare the effects of market volatilities on Sitime 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 Sitime with a short position of FTC Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitime and FTC Solar.
Diversification Opportunities for Sitime and FTC Solar
Very weak diversification
The 3 months correlation between Sitime and FTC is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sitime and FTC Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC Solar and Sitime 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 Sitime 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 Sitime i.e., Sitime and FTC Solar go up and down completely randomly.
Pair Corralation between Sitime and FTC Solar
Given the investment horizon of 90 days Sitime is expected to generate 1.12 times more return on investment than FTC Solar. However, Sitime is 1.12 times more volatile than FTC Solar. It trades about 0.14 of its potential returns per unit of risk. FTC Solar is currently generating about -0.52 per unit of risk. If you would invest 18,186 in Sitime on August 29, 2024 and sell it today you would earn a total of 2,790 from holding Sitime or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitime vs. FTC Solar
Performance |
| Timeline |
| Sitime |
| FTC Solar |
Sitime and FTC Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitime and FTC Solar
The main advantage of trading using opposite Sitime and FTC Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitime 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.| Sitime vs. Lattice Semiconductor | Sitime vs. Qorvo Inc | Sitime vs. Microchip Technology | Sitime vs. Silicon Laboratories |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |