Correlation Between Wisekey International and First Solar
Can any of the company-specific risk be diversified away by investing in both Wisekey International and First 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 Wisekey International and First Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wisekey International Holding and First Solar, you can compare the effects of market volatilities on Wisekey International and First 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 Wisekey International with a short position of First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisekey International and First Solar.
Diversification Opportunities for Wisekey International and First Solar
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wisekey and First is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and Wisekey International 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 Wisekey International Holding are associated (or correlated) with First Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Solar has no effect on the direction of Wisekey International i.e., Wisekey International and First Solar go up and down completely randomly.
Pair Corralation between Wisekey International and First Solar
Given the investment horizon of 90 days Wisekey International Holding is expected to generate 3.19 times more return on investment than First Solar. However, Wisekey International is 3.19 times more volatile than First Solar. It trades about 0.09 of its potential returns per unit of risk. First Solar is currently generating about 0.04 per unit of risk. If you would invest 174.00 in Wisekey International Holding on September 14, 2024 and sell it today you would earn a total of 612.00 from holding Wisekey International Holding or generate 351.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wisekey International Holding vs. First Solar
Performance |
| Timeline |
| Wisekey International |
| First Solar |
Wisekey International and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wisekey International and First Solar
The main advantage of trading using opposite Wisekey International and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisekey International position performs unexpectedly, First 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 First Solar will offset losses from the drop in First Solar's long position.| Wisekey International vs. SemiLEDS | Wisekey International vs. GSI Technology | Wisekey International vs. SEALSQ Corp | Wisekey International vs. WiSA Technologies |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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