Correlation Between Xinyi Solar and Shoals Technologies
Can any of the company-specific risk be diversified away by investing in both Xinyi Solar and Shoals 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 Xinyi Solar and Shoals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinyi Solar Holdings and Shoals Technologies Group, you can compare the effects of market volatilities on Xinyi Solar and Shoals 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 Xinyi Solar with a short position of Shoals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinyi Solar and Shoals Technologies.
Diversification Opportunities for Xinyi Solar and Shoals Technologies
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xinyi and Shoals is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Xinyi Solar Holdings and Shoals Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoals Technologies and Xinyi Solar 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 Xinyi Solar Holdings are associated (or correlated) with Shoals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoals Technologies has no effect on the direction of Xinyi Solar i.e., Xinyi Solar and Shoals Technologies go up and down completely randomly.
Pair Corralation between Xinyi Solar and Shoals Technologies
Assuming the 90 days horizon Xinyi Solar Holdings is expected to under-perform the Shoals Technologies. But the pink sheet apears to be less risky and, when comparing its historical volatility, Xinyi Solar Holdings is 1.76 times less risky than Shoals Technologies. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Shoals Technologies Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 536.00 in Shoals Technologies Group on August 28, 2024 and sell it today you would lose (29.00) from holding Shoals Technologies Group or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinyi Solar Holdings vs. Shoals Technologies Group
Performance |
| Timeline |
| Xinyi Solar Holdings |
| Shoals Technologies |
Xinyi Solar and Shoals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinyi Solar and Shoals Technologies
The main advantage of trading using opposite Xinyi Solar and Shoals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinyi Solar position performs unexpectedly, Shoals 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 Shoals Technologies will offset losses from the drop in Shoals Technologies' long position.| Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. SMA Solar Technology | Xinyi Solar vs. GCL Poly Energy Holdings | Xinyi Solar vs. Three Sixty Solar |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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