Correlation Between ISun and First Solar

Can any of the company-specific risk be diversified away by investing in both ISun 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 ISun and First Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ISun Inc and First Solar, you can compare the effects of market volatilities on ISun 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 ISun with a short position of First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISun and First Solar.

Diversification Opportunities for ISun and First Solar

0.57

Correlation Coefficient

ISun  First Solar

Very weak diversification

The 3 months correlation between ISun and First is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ISun Inc and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and ISun 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 ISun Inc 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 ISun i.e., ISun and First Solar go up and down completely randomly.

Pair Corralation between ISun and First Solar

If you would invest  3.19  in ISun Inc on September 19, 2024 and sell it today you would earn a total of  0.00  from holding ISun Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

ISun Inc  vs.  First Solar

ISun Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ISun Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ISun is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

First Solar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Solar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ISun and First Solar

The main advantage of trading using opposite ISun and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISun 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.

The idea behind ISun Inc and First Solar pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.