Correlation Between FT AlphaDEX and Solar Alliance

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

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

Diversification Opportunities for FT AlphaDEX and Solar Alliance

-0.69

Correlation Coefficient

FT AlphaDEX  Solar Alliance

Excellent diversification

The 3 months correlation between FHG and Solar is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding FT AlphaDEX Industrials and Solar Alliance Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Alliance Energy and FT AlphaDEX 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 FT AlphaDEX Industrials are associated (or correlated) with Solar Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Alliance Energy has no effect on the direction of FT AlphaDEX i.e., FT AlphaDEX and Solar Alliance go up and down completely randomly.

Pair Corralation between FT AlphaDEX and Solar Alliance

If you would invest  5,533  in FT AlphaDEX Industrials on September 3, 2024 and sell it today you would earn a total of  631.00  from holding FT AlphaDEX Industrials or generate 11.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

FT AlphaDEX Industrials  vs.  Solar Alliance Energy

FT AlphaDEX Industrials

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FT AlphaDEX Industrials are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, FT AlphaDEX displayed solid returns over the last few months and may actually be approaching a breakup point.

Solar Alliance Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Solar Alliance Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Solar Alliance showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FT AlphaDEX and Solar Alliance

The main advantage of trading using opposite FT AlphaDEX and Solar Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT AlphaDEX position performs unexpectedly, Solar Alliance 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 Solar Alliance will offset losses from the drop in Solar Alliance's long position.

The idea behind FT AlphaDEX Industrials and Solar Alliance Energy 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.