Correlation Between Go Solar and Solar Integrated

Can any of the company-specific risk be diversified away by investing in both Go Solar and Solar Integrated 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 Solar Integrated 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 Solar Integrated Roofing, you can compare the effects of market volatilities on Go Solar and Solar Integrated 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 Solar Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Go Solar and Solar Integrated.

Diversification Opportunities for Go Solar and Solar Integrated

0.0

Correlation Coefficient

Go Solar  Solar Integrated

Pay attention - limited upside

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

Pair Corralation between Go Solar and Solar Integrated

If you would invest  0.01  in Solar Integrated Roofing on December 26, 2024 and sell it today you would lose (0.01) from holding Solar Integrated Roofing or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Go Solar USA  vs.  Solar Integrated Roofing

Go Solar USA

Risk-Adjusted Performance

Very Weak

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 newest stock price disarray, may contribute to short-term losses for the investors.

Solar Integrated Roofing

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Solar Integrated Roofing are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Solar Integrated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Go Solar and Solar Integrated

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

The idea behind Go Solar USA and Solar Integrated Roofing 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.