Correlation Between Consolidated Communications and FTC SOLAR

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

By analyzing existing cross correlation between Consolidated Communications Holdings and FTC SOLAR INC, you can compare the effects of market volatilities on Consolidated Communications 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 Consolidated Communications with a short position of FTC SOLAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Communications and FTC SOLAR.

Diversification Opportunities for Consolidated Communications and FTC SOLAR

-0.79

Correlation Coefficient

Consolidated Communications  FTC SOLAR

Pay attention - limited upside

The 3 months correlation between Consolidated and FTC is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications Ho and FTC SOLAR INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC SOLAR INC and Consolidated Communications 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 Consolidated Communications Holdings 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 INC has no effect on the direction of Consolidated Communications i.e., Consolidated Communications and FTC SOLAR go up and down completely randomly.

Pair Corralation between Consolidated Communications and FTC SOLAR

If you would invest  446.00  in Consolidated Communications Holdings on October 15, 2024 and sell it today you would earn a total of  2.00  from holding Consolidated Communications Holdings or generate 0.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	60.0%
Values	Daily Returns

Consolidated Communications Ho  vs.  FTC SOLAR INC

Consolidated Communications

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Consolidated Communications Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Consolidated Communications may actually be approaching a critical reversion point that can send shares even higher in February 2025.

FTC SOLAR INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FTC SOLAR INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Consolidated Communications and FTC SOLAR

The main advantage of trading using opposite Consolidated Communications and FTC SOLAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications 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.

The idea behind Consolidated Communications Holdings and FTC SOLAR INC 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.