Correlation Between Zeo Energy and First Solar
Can any of the company-specific risk be diversified away by investing in both Zeo Energy 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 Zeo Energy and First Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zeo Energy Corp and First Solar, you can compare the effects of market volatilities on Zeo Energy 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 Zeo Energy with a short position of First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zeo Energy and First Solar.
Diversification Opportunities for Zeo Energy and First Solar
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zeo and First is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Zeo Energy Corp and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and Zeo Energy 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 Zeo Energy Corp 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 Zeo Energy i.e., Zeo Energy and First Solar go up and down completely randomly.
Pair Corralation between Zeo Energy and First Solar
Considering the 90-day investment horizon Zeo Energy Corp is expected to under-perform the First Solar. But the stock apears to be less risky and, when comparing its historical volatility, Zeo Energy Corp is 1.21 times less risky than First Solar. The stock trades about -0.11 of its potential returns per unit of risk. The First Solar is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 20,494 in First Solar on September 2, 2024 and sell it today you would lose (567.00) from holding First Solar or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zeo Energy Corp vs. First Solar
Performance |
| Timeline |
| Zeo Energy Corp |
| First Solar |
Zeo Energy and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zeo Energy and First Solar
The main advantage of trading using opposite Zeo Energy and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeo Energy 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.| Zeo Energy vs. Biglari Holdings | Zeo Energy vs. Texas Roadhouse | Zeo Energy vs. CAVA Group, | Zeo Energy vs. Tencent Music Entertainment |
| First Solar vs. Enphase Energy | First Solar vs. Sunrun Inc | First Solar vs. Canadian Solar | First Solar vs. SolarEdge Technologies |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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