Correlation Between Go Solar and ABCO Energy

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

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

Diversification Opportunities for Go Solar and ABCO Energy

0.0

Correlation Coefficient

Go Solar  ABCO Energy

Pay attention - limited upside

The 3 months correlation between GSLO and ABCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Go Solar USA and ABCO Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABCO Energy and Go 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 Go Solar USA are associated (or correlated) with ABCO Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABCO Energy has no effect on the direction of Go Solar i.e., Go Solar and ABCO Energy go up and down completely randomly.

Pair Corralation between Go Solar and ABCO Energy

If you would invest  0.01  in ABCO Energy on September 18, 2024 and sell it today you would earn a total of  0.00  from holding ABCO Energy or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Go Solar USA  vs.  ABCO Energy

Go Solar USA

Risk-Adjusted Performance

0 of 100

OK

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

ABCO Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABCO Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, ABCO Energy is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Go Solar and ABCO Energy

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

The idea behind Go Solar USA and ABCO 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.